[1/2]Tesla and SpaceX CEO Elon Musk pauses during an event to talk with British Prime Minister Rishi Sunak in London, Britain, Thursday, November 2, 2023. Kirsty Wigglesworth/Pool via REUTERS/File Photo License Rights Acquired
NEW YORK, Nov 21 (Reuters) – New York Comptroller Brad Lander told Reuters on Tuesday that Tesla’s ( TSLA.O ) board of directors should sanction Chief Executive Elon Musk if he does not apologize for endorsing an anti-Semitic comment on his social media platform X .
Lander controls about $946 million in Tesla shares for public pension funds in New York. This amount is equivalent to a stake of around 0.1% in the electric vehicle manufacturer. Lander’s remarks make him the latest Tesla shareholder to call on the electric car maker to rein in Musk. Earlier, smaller investors, including Nia Impact Capital and Ross Gerber, CEO of Gerber Kawasaki Wealth & Investment Management, expressed concerns about Musk’s action.
Musk endorsed an anti-Semitic post on social media platform X, formerly known as Twitter, on November 15. The post alleged that members of the Jewish community were inciting hatred against white people. Musk said the person who made the post was speaking “the real truth.”
Lander said Tuesday that Musk’s action spells trouble for Tesla, citing a section of the automaker’s code of business ethics that prohibits harassment “at any level of the organization.”
“There is a real risk that if he is perceived as anti-Semitic, that will have a real impact on Tesla’s sales and value,” Lander said.
It remains unclear whether Tesla’s board will take any action. He has supported Musk on various controversies, ranging from settling fraud charges with the US Securities and Exchange Commission to devoting the CEO’s time and resources to other ventures such as rocket maker SpaceX, brain chip startup Neuralink, contractor of Boring Company tunnels and X He also defended it after shareholders challenged its $56 billion in compensation in court.
Tesla did not respond to questions about Lander’s comments on Tuesday.
Shares of Tesla, which have nearly doubled in value this year, traded on Tuesday at about the same level before Musk endorsed the anti-Semitic post on November 15.
Musk has since denied being anti-Semitic, and X CEO Linda Iaccarino told employees that “the data will tell the real story” about the company’s efforts to combat anti-Semitism.
Lander said Tesla’s board should make it clear to Musk that he should take steps such as removing his post and apologizing for it. If Musk fails to do so, Tesla’s board should consider actions such as withholding his salary, suspending him or terminating him, Lander added.
“The board needs to hold him accountable, but what we need more these days is to show how people can grow and change,” Lander said.
Lander acknowledged that Musk’s contributions to Tesla’s success may make the board reluctant to act against him. He wrote to Tesla board chairman Robin Denholm on Monday that failure to act would show that Tesla’s code of business ethics is “toothless.”
He also cited the case of automotive icon Henry Ford, whose role in perpetuating anti-Semitism was recognized as a problem in September by the president of the Ford Foundation.
Musk’s endorsement of the anti-Semitic post led to condemnation from the White House, which accused Musk of “abhorrent promotion of anti-Semitic and racist hatred” that “goes against our core values as Americans.”
Musk is the largest individual holder of Tesla stock, with a 20.6 percent stake, according to the company’s latest filing. Proxy advisers, who recommend how investors should vote at annual shareholder meetings, have criticized Tesla’s board of directors on issues including their independence
Big corporate advertisers have fled X since Musk bought it in October 2022, amid concerns from civil rights groups that reduced content moderation has led to a sharp rise in hate speech.
Several others have quit in recent days after a report by the liberal watchdog Media Matters for America said content promoting Nazism appeared next to their ads. Musk denied this and filed a lawsuit against Media Matters on Monday.
Musk also made several comments aimed at the Anti-Defamation League, a nonprofit that fights anti-Semitism. Tesla and Musk are also defending against allegations of discrimination or racial or sexual harassment of workers in lawsuits filed by state and federal civil rights agencies.
In a public call with investors on Tuesday, Christine Hull of Nia Impact Capital said Musk’s comments represented “the first time investors have had to deal with a CEO who doesn’t seem to be looking for the best in his own brand. . So we’re asking the board to step in and offer a solution here.”
Last week, Nia asked Tesla’s board to take action against Musk, such as “board censure, demotion, reassignment, suspension or removal.”
Reporting by Ross Kerber in New York Additional reporting by David Gaffen in New York and Sheila Dang in Dallas Editing by Greg Roumeliotis and Matthew Lewis
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