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Warren questions Musk’s management of Tesla

Warren questions Musk’s management of Tesla

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Musk's management

Senator Elizabeth Warren has raised concerns over Tesla CEO Elon Musk’s management practices in a letter addressed to Tesla Chairperson Robyn Denholm. Warren’s inquiry focuses on whether Musk has potentially breached his fiduciary duty to the company by using Tesla resources to benefit his other ventures, including SpaceX and xAI. In the letter, Warren questions if the board has examined Musk’s use of Tesla’s assets for his personal projects.

Warren’s letter follows previous calls for the Securities and Exchange Commission to investigate Musk due to similar concerns.

“Tesla’s Board of Directors appears to be failing to meet its fiduciary duties to Tesla’s shareholders by neglecting to address company CEO Elon Musk’s apparent conflicts of interest,” Warren wrote. The senator cited specific issues, such as Musk’s sale of Tesla shares to finance his acquisition of Twitter, now rebranded as X.

Warren questions Tesla’s board oversight

Additionally, Warren expressed worries about Musk potentially engaging in robotics and AI projects outside of Tesla and encouraging Tesla shareholders to approve actions that benefit his personal ventures. Warren’s letter also pointed out that Musk has redirected resources initially meant for Tesla to his other companies.

For instance, recent correspondence from Nvidia staffers indicated that Musk diverted a sizable shipment of AI processors from Tesla to X. Moreover, Warren highlighted xAI’s recruitment of employees from Tesla, which raises questions about the board’s oversight of Musk’s actions. One former director described Tesla as operating “like a family company with fiefdoms, rather than a public company with stringent rules and regulations.”

The senator has requested answers from Denholm and Tesla concerning these oversight issues by August 23.

A spokesperson for Warren’s office noted that previous letters to Denholm have gone unanswered. So far, Tesla has not responded to requests for comment.

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