Major Tesla shareholder says Elon Musk doesn’t have to be CEO
A major investor in Tesla thinks the company would be fine without Elon Musk as CEO.
“We wouldn’t be against him having a different role. I don’t think he needs to be CEO,” said James Anderson, head of global equities for Baillie Gifford, in an interview with Barron’s. The investment firm owns 7.7% of Tesla shares, second only to Musk himself.
Anderson isn’t advocating for Musk’s ouster. He believes that Musk is essential to Tesla, but that he might be better suited for another position, such as such “chief ideologue.”
Tesla might benefit from some distance from Musk, too, Anderson said in another interview with Bloomberg. “We need to differentiate the company from him,” he said.
The Securities and Exchange Commission forced Musk to give up his chairman position last year for making what it argued were deceptive comments to investors. The agency reached a deal with Musk and Tesla to let him keep the CEO position, but last week it sought to have him held in contempt when he tweeted that the company would make 500,000 cars this year. That information did not jibe with the company’s guidance.
Musk corrected the tweet within hours to say Tesla would make about 400,000 cars and would be making cars at a 500,000 annual pace by the end of the year, which was in line with the company’s guidance. But the correction did not stop the SEC from complaining to a federal judge.
Baillie Gifford has talked to the Tesla about “whether Mr. Musk’s comments and the like do help” with company’s broad objectives, Anderson told Bloomberg.
He said Tesla should “enable him [Musk] to step back from having him feel so driven to comment.”
A spokesperson for Baillie Gifford said the firm had no additional comment about Tesla and Musk. Tesla did not respond to a request for comment.
Musk announced last week that the company would start to take orders for a long-promised $35,000 version of the Model 3. But he also warned that Tesla would not be profitable in the first quarter. The company finally achieved two profitable quarters at the end of 2018.
He also announced plans to close most of Tesla’s stores in a cost-cutting move. The company will only accept online and phone orders for the cars. It was a reversal of its previous plans to add more stores.
Shares of Tesla have fallen by about 14% since those announcements.