- Tesla shares fell after a news report about blurred personal and professional boundaries between CEO Musk and the company’s board of directors.
- Additionally, German software giant SAP SE said it will stop purchasing Tesla vehicles for its corporate fleet.
- The reports added to the series of negative press for Tesla, including a Delaware court vacating Musk’s 2018 compensation package.
Tesla Inc. (TSLA) shares fell Monday morning after He Wall Street Journal Saturday outlined the blurred personal and professional boundaries between Chief Executive Officer (CEO) Elon Musk and the directors responsible for overseeing his work.
“Several current or former directors of Tesla and SpaceX attend parties with him, go on exotic vacations and hang out at Burning Man, Nevada’s arts and music festival,” according to the Diary. They have also “accumulated hundreds of millions of dollars worth of stock from their positions over the years, significantly more than board members of other companies earn for their services.”
The report comes just days after a Delaware court voided Musk’s 2018 compensation package, valued at up to $55.8 billion. “The process that led to the approval of Musk’s compensation plan was seriously flawed,” wrote Chancellor Kathaleen McCormick, who cited her professional and personal ties to the principals with whom she negotiated the pay package.
In response, Musk said in a post on X (formerly Twitter) that Tesla would hold a shareholder vote on transferring its incorporation status to Texas from Delaware. The company moved its corporate headquarters to Austin, Texas, from Palo Alto, California, in 2021 after Musk criticized California’s tax and regulatory environment.
Adding to the bad news for Tesla investors on Monday, German software giant SAP SE (SAP) will stop purchasing Tesla vehicles for its corporate fleet due to unpredictable deliveries and price swings, according to German newspaper Handelsblatt.
It follows German rental company Sixt, which in December removed Tesla from its fleet because the company’s price cuts on new vehicles were devaluing its used fleet. US rental company Hertz said in January it would reduce the size of its Tesla and electric vehicle (EV) fleet due to weak demand and price instability.
Tesla shares fell nearly 4% to $180.80, near an eight-month low, in intraday trading as of 12:32 p.m. ET on Monday.