Tesla Shareholder Urges Board to Suspend Elon Musk Over Antisemitic Post Agreement

In a recent turn of events, an investor in Tesla, Jerry Braakman, who also happens to be the president of First American Trust, has called upon Tesla’s board of directors to take action against CEO Elon Musk for endorsing antisemitic views on social media. Braakman believes that it’s crucial for the board to send a clear message that Musk’s recent actions crossed a line by agreeing with an antisemitic post on X (formerly known as Twitter), which claimed that Jewish communities promote “hatred against Whites.”

While Braakman acknowledges the importance of free speech, he firmly believes that there is no excuse for a CEO of a public company to spread hatred. He stated, “I believe in free speech, but there’s no excuse for spreading hatred by a CEO of a public company.”

On the heels of Musk’s controversial social media activity, several major brands, including Disney, NBCUniversal, CNN owner Warner Bros. Discovery, and others, took a significant step by halting their advertising on X, a platform owned by Musk. Although these companies did not explicitly state that their decision was related to Musk’s post, some of their advertisements were found to be placed near antisemitic posts on X, as reported by Media Matters.

In response to Musk’s actions, Braakman proposes that Tesla’s board temporarily suspend Musk for a period of 30 to 60 days and require him to undergo empathy training and/or therapy. Braakman argued, “Neither his wealth nor his technical and business prowess excuse his statements. It seems it has only amplified the demons he carries. And it screams that he needs help.”

Jeffrey Sonnenfeld, the dean for leadership studies at the Yale School of Management, shares Braakman’s perspective. He believes that Tesla’s board should hold Musk accountable for his actions. Sonnenfeld stated, “The board has a responsibility to act. He should not be able to use the title of chief executive officer. That should be suspended right away.”

Notably, Musk’s role at Tesla is significant. He co-founded the company and is viewed as the most influential figure within the organization. He not only holds a seat on the board of directors but also stands as the largest individual shareholder, with 411 million shares, constituting approximately a 13% stake valued at around $96 billion.

In contrast, First American Trust, based in Santa Ana, Calif., owns a relatively small stake of 16,000 shares as of the end of September.

Tesla’s board, led by Chair Robyn Denholm, includes notable members such as James Murdoch, venture capitalist Ira Ehrenpreis, Musk’s younger brother Kimbal, and Musk himself. Braakman emphasized that only the board has the authority to hold Musk accountable, even though he has many friends within it.

‘No Confidence’ in the Board

Nell Minow, a Tesla shareholder and vice chair of ValueEdge Advisors, which advises institutional investors on corporate governance matters, has expressed her concerns about Musk’s behavior. She believes that Tesla’s board should engage a firm to assess the impact of Musk’s actions on the car company’s brand following his “terrible behavior.”

Minow disclosed that she had been considering buying a Tesla but has now reconsidered, stating, “I had been thinking about buying a Tesla, but that’s off the table now. I just don’t want to support him.” She also expressed a lack of confidence in the board’s willingness to provide effective oversight over Musk.

“The board has plenty of reason to replace him as CEO. But do they have the ability to do it? Do they have the courage to do it? The answer is no,” Minow added. She also voiced her concerns as a Jewish person, citing Musk’s instability as a significant worry in addition to his antisemitism.

Another Tesla shareholder, Ross Gerber, who serves as the CEO and president of Gerber Kawasaki, strongly criticized Musk’s behavior, calling it “absolutely outrageous” and asserting that it is “destroying the brand.” He remarked, “I’ve just never had this with any company I’ve ever invested in, ever in my life.”

However, amid the controversy, some prominent business leaders, such as hedge fund billionaire Bill Ackman, have come to Musk’s defense. Ackman, who has been critical of how universities have handled antisemitism, stated that Musk is “not an antisemite.” He also noted the rapidity with which the world is ready to criticize Musk for his candid commentary.

As the debate surrounding Elon Musk’s actions and Tesla’s response intensifies, it remains to be seen how the board will address this issue and what impact it will have on the company’s future.

The controversy surrounding Elon Musk’s endorsement of an antisemitic post on social media has sparked a heated debate among Tesla shareholders and corporate governance experts. While some believe that Musk’s actions warrant suspension and accountability, others come to his defense. The board of directors faces a significant decision in handling this situation, which has the potential to impact both the company’s reputation and its future. As the story unfolds, the eyes of the business world remain fixed on Tesla and its response to this challenging situation.

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