Tesla Ethical Crossroads: In a significant development, New York City Comptroller Brad Lander, responsible for overseeing approximately $946 million in Tesla shares on behalf of the city’s public retirement funds, has voiced concerns and called for accountability from Tesla CEO Elon Musk. Lander’s comments come in response to Musk’s endorsement of an antisemitic post on the social media platform X, which was formerly known as Twitter.
Lander’s role as a steward of significant Tesla shares positions him as a key figure urging the company’s board to take action against Musk if he fails to apologize for the controversial social media endorsement. The value of the Tesla shares overseen by Lander is equivalent to approximately 0.1% of the electric vehicle (EV) maker’s total market capitalization.
This move by Lander aligns with a growing chorus of concerns expressed by various investors, including smaller players such as Nia Impact Capital and Ross Gerber, CEO of Gerber Kawasaki Wealth & Investment Management. These investors have also raised apprehensions about Musk’s recent actions and the potential impact on Tesla’s reputation and financial standing.
Elon Musk’s endorsement of an antisemitic post on X sparked controversy and drew condemnation from various quarters, including the White House. The post in question propagated false claims against members of the Jewish community, alleging their involvement in stoking hatred against white people. Musk, in response, defended the post, stating that the person making the comment was speaking “the actual truth.”
Also Read: Musk Fights SEC Harassment Rejects Testimony in Twitter Probe
Brad Lander, in his capacity as the overseer of Tesla shares, emphasized the potential risks to Tesla’s sales and overall value if Musk continues to be perceived as antisemitic. He highlighted a specific section in Tesla’s code of business ethics that prohibits bullying at any level of the organization. Lander argued that if Musk is viewed as antisemitic, it could have far-reaching consequences for the company.
Despite the controversy and calls for accountability, it remains to be seen how Tesla’s board will respond. The board has historically stood by Musk through various controversies, ranging from legal settlements with the U.S. Securities and Exchange Commission to Musk’s involvement in other ventures such as SpaceX, Neuralink, the Boring Company, and X.
Tesla’s stock performance has been closely monitored amid these developments. Despite nearly doubling in value throughout the year, Tesla shares experienced a slight dip following Musk’s antisemitic endorsement on X. The board’s response to Lander’s calls for accountability will likely influence how investors perceive Tesla’s commitment to ethical standards and corporate governance.
In a broader context, this incident raises questions about the challenges faced by companies when their high-profile executives engage in controversial behavior. The role of corporate boards in addressing such situations, particularly when the executive in question is a key figure in the company’s success, becomes a focal point of discussion. Investors are increasingly looking to boards to take a proactive role in safeguarding the company’s reputation and values, even if it means holding influential leaders accountable for their actions. As Tesla navigates this situation, the outcome will likely have implications for corporate governance discussions within the broader business community.
Our Reader’s Queries
What ethical issues has Tesla faced?
Tesla has come under fire for its poor treatment of employees and policies that have resulted in a high injury rate. Some employees have reported facing sexual harassment, racism, and union-busting incidents. Critics have also raised concerns about Tesla’s environmental practices, use of cryptocurrencies, and compliance with open source licenses. These issues have sparked widespread debate and scrutiny, with many calling for Tesla to address these concerns and improve its overall approach to employee relations and corporate responsibility.
How does Tesla’s distribution strategy differ from other automakers?
Tesla stands out from other car manufacturers by selling directly to consumers, rather than relying on franchised dealerships. To make this possible, the company has established a global network of company-owned showrooms and galleries, primarily located in urban areas. This unique approach allows Tesla to maintain greater control over the sales process and provide a more personalized experience for customers.
Is Tesla a profitable company?
The company’s third quarter earnings for 2023 showed a slight increase in revenue, reaching $23.4 billion compared to $21.4 billion the previous year. However, there was a significant drop in profits, falling from $3.3 billion to $1.9 billion despite the similar revenue.
Who invented Tesla?
In 2003, Tesla Motors was established by engineers Martin Eberhard and Marc Tarpenning as an electric car manufacturer. The initial investment rounds were led by Elon Musk, co-founder of Paypal, who later became the CEO. The Roadster, Tesla’s first electric car, was launched in 2008.