Billionaire Elon Musk’s grip over Tesla Motors has grown too tight as he pursues a controversial merger of the company with solar-panel maker SolarCity, an investor group complained.
CtW Investment Group, a manager of union-based pension funds that hold 200,000 Tesla shares, demanded in a letter that Tesla separate Musk’s chairman and CEO roles.
CtW likewise called on Tesla to add two “genuinely independent directors” to Tesla’s board to evaluate its $2.8 billion SolarCity offer.
The surprise deal, announced last week, sent Tesla shares tumbling on worries about SolarCity’s losses and debt.
“We are concerned that Mr. Musk continues to dominate the board and sits at the heart of a complex web of relationships,” CtW said in its late Tuesday letter.
Musk, who is the chairman of, and biggest shareholder in, both Tesla and SolarCity, is also the cousin of SolarCity founder Lyndon Rive. Musk’s brother, Kimbal, is a Tesla director, and six of Tesla’s seven directors have SolarCity ties, CtW said.
The investment group asked that Tesla amend its bylaws to forbid immediate family members from serving concurrently on the board. It also called for annual elections for all directors.
“It will be Tesla’s disinterested shareholders that have the final say on whether this combination is right for Tesla,” a Tesla spokeswoman said. “Nobody has more at stake in the success of Tesla than Elon.”
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