Tesla is facing mounting pressure from some of its largest institutional shareholders as concerns grow over CEO Elon Musk’s controversial leadership and the company’s board oversight, Forbes reports.
Pension funds, union leaders, and public officials argue that Musk’s political involvement and personal behavior are damaging the brand and putting long-term shareholder value at risk.
One of the most vocal critics is the American Federation of Teachers (AFT), whose pension funds hold nearly $9 billion in Tesla shares. AFT President Randi Weingarten says the group is urging Tesla’s board — and major investment firms like BlackRock, Vanguard, and Fidelity — to reassess their support for Musk’s leadership.
“If you’re going to have Musk there, then make sure he’s there. Don’t have him do these extracurricular activities. Make sure he’s there or get another CEO,” she told Forbes.
The concerns stem from Musk’s divided attention between Tesla and his other ventures, which include SpaceX, Neuralink, X (formerly Twitter), and The Boring Company. More recently, his stint in the Trump administration leading the controversial DOGE initiative has drawn significant backlash from Tesla customers and investors alike. A poll conducted by GBAO found that 51% of Americans surveyed would view Tesla more favorably if Musk were replaced as CEO. The same poll showed that Musk is viewed unfavorably by 55% of respondents, with Tesla ranking lowest among potential EV buyers.
Public pension officials are increasingly expressing frustration. Nine state treasurers and comptrollers — including those from California, Illinois, and Maryland — signed a letter in April calling on Tesla Chair Robyn Denholm to address what they view as weak governance.
“No other publicly traded company CEO would’ve been allowed to neglect his duties like Musk has,” said Illinois Treasurer Michael Frerichs.
Maryland Comptroller Brooke Lierman echoed these sentiments, stating that boards must be accountable for ensuring responsible governance.
“Tesla’s brand has suffered dramatically alongside Elon Musk’s brand — in some ways they’re one and the same,” she said.
Maryland’s state retirement system holds about $175 million in Tesla stock.
Despite the criticism, Tesla’s stock has recently rebounded, climbing more than 50% since April, fueled by investor optimism that Musk will re-engage with the company ahead of its upcoming robotaxi launch in Austin. Musk has also made public comments distancing himself from Trump’s economic policies, calling the administration’s latest budget proposal a “disgusting abomination.”
Still, many remain skeptical that Musk’s political entanglements and public behavior won’t continue to affect Tesla’s image. GBAO principal Margie Omero noted that the company’s primary customer base — which tends to lean Democratic — has become increasingly alienated.
“If you look at what’s happened to views toward Musk and the brand among people who are the target, it seems irreversible,” she said.
In the absence of a formal response from Tesla’s board, Weingarten says AFT is considering legal action to compel the company to act.
“If boards are not going to do their job, outside pension funds, including advocates of them, are going to try to force these boards to do their jobs,” she said.
