Musk has racked up potential labor considerations and conflicts of curiosity in his Twitter dealings, Warren wrote.
Sen. Elizabeth Warren (D-Massachusetts) is elevating alarm that Elon Musk is shirking authorized obligations, misappropriating sources and ignoring potential conflicts of curiosity in his possession of Twitter, saying in a brand new letter to Tesla’s board chair that Musk is treating the social media web site as a “non-public plaything.”
In her letter despatched on Sunday, Warren raised concern over the way in which that Musk has dealt with his buy of Twitter and the way in which he has carried out promoting on the platform — actions that might hurt Musk’s Tesla and different firms and that are already harming shareholders. She mentioned there could possibly be purpose to imagine that Musk has “failed to fulfill [the] authorized obligation” required of firm house owners to guard the entire companies that they personal.
“One key ingredient of [company officers’ and directors’] duties is that each Board of Administrators of an organization with a number of shareholders — particularly publicly traded firms — is chargeable for making certain {that a} controlling shareholder (particularly one who can be a Chief Govt Officer, or CEO) doesn’t deal with the corporate as a non-public plaything,” she mentioned.
“That duty consists of making certain that Mr. Musk is an efficient CEO and that he fulfills his authorized obligation to behave in one of the best pursuits of Tesla and all of its shareholders, not simply himself,” she continued.
Certainly, some shareholders have raised related considerations, with Tesla’s third-largest shareholder saying final week that Musk has “deserted Tesla and Tesla has no working CEO.” Tesla’s shares, which have already dropped precipitously this 12 months, have decreased in value as shareholders have raised discontent over Musk’s Twitter possession.
One subject is Musk’s “misappropriation of Tesla sources,” Warren wrote. That Musk reportedly pulled greater than 50 staff from Tesla to work on Twitter “raises apparent questions on whether or not Mr. Musk is appropriating sources from a publicly traded agency, Tesla, to learn his personal non-public firm, Twitter,” she mentioned. It additionally raises labor considerations — of which there are various relating to each Tesla and Twitter — about whether or not these staff have been sufficiently compensated for his or her further work.
“This use of Tesla staff raises apparent questions on whether or not Mr. Musk is appropriating sources from a publicly traded agency, Tesla, to learn his personal non-public firm,” Warren wrote. “The [Securities and Exchange Commission (SEC)] imposes a authorized obligation on firms to make public any ‘materials definitive agreements,’ together with employment agreements with government officers, however Tesla up to now has reported no such agreements.”
One other subject of concern for the senator is Musk’s failure to reveal or keep in mind conflicts of curiosity raised by his possession of Twitter. In coping with Twitter advertisers — the principle income for the corporate — Musk has the ability to suppress advertisements from different auto producers that will compete with Tesla, whereas additionally with the ability to overcharge Tesla for advertisements on the platform as a way to assist repay Twitter’s money owed.
Warren urged Tesla’s board to take motion to make clear these points to themselves and to the general public as a way to maintain Musk accountable.
Musk has been in Warren’s crosshairs earlier than. This spring, as Musk was considering the Twitter buy, she mentioned that each the privatization and his possession of Twitter would trigger large points that might have penalties for democracy itself. Permitting Musk to purchase Twitter — a platform that’s basically a city sq. for journalists, activists and politicians — is tantamount to handing over large political energy to a single billionaire.
Certainly, Musk appears to be exposing his right-wing ideology increasingly the longer he owns Twitter. Throughout his few months of Twitter possession up to now, Musk has reinstated anti-trans activists and neo-Nazis whereas banning Democratic and left-leaning journalists en masse.
