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Elon Musk should be enabled to step back from Tesla, investor says

One of Tesla Inc.'s largest investors said chief executive officer Elon Musk may better serve the company by being less outspoken.

[NEW YORK] One of Tesla Inc.'s largest investors said chief executive officer Elon Musk may better serve the company by being less outspoken.

James Anderson, a partner and portfolio manager at Baillie Gifford & Co., said Tuesday on Bloomberg Television that he was "extraordinarily unsuccessful" in pleading with Musk in July for him to take a more peaceful approach to running the company. The following months, Musk tweeted he secured funding to take the company private, abandoned that pursuit and then settled a US Securities and Exchange Commission lawsuit.

Around that same time, the electric-car maker also made major progress ramping up production of its Model 3 sedan. As Tesla's largest shareholder after Musk, Anderson said Baillie Gifford feels it's appropriate to discuss - but not dictate - whether the CEO's comments help the company achieve its mission. He added that the billionaire should be "enabled to step back from having to feel so driven to comment."

"You can be in the background," Anderson said. "I can't remember the last time that Jeff Bezos turned up on a quarterly call, let alone felt the need to talk about analysts, even though I suspect he's got some quite big thoughts about them."

In a separate interview with Barron's, Anderson said Baillie Gifford wouldn't be against Musk having a different role at the company.

"I don't think he needs to be CEO," Anderson told Barron's.

Performance Award

Musk, 47, may not have as much flexibility to step back as Anderson suggested. He was given a performance award last year valued at US$2.6 billion, one of the largest compensation deals in history.

One requirement of the award, which is pegged to sky-high targets for Tesla's market capitalisation, revenue and profitability, is that the billionaire remain either CEO or executive chairman and chief product officer. But the company agreed to prevent him from being chairman for at least three years as one of the conditions of its settlement its take-private settlement reached in September.

Tesla fell 3.1 per cent to close at US$276.54 on Tuesday, the lowest since Oct 22. The company has lost about US$7.5 billion in market capitalisation since Musk announced plans to wind down most stores and shift all sales to online-only ordering.

Baillie Gifford holds about 7.7 per cent of Tesla shares, according to data compiled by Bloomberg. The Edinburgh-based firm also is one of the bigger investors in the Bezos-run Inc.


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