The board of directors at Tesla is facing a difficult decision in response to CEO Elon Musk’s public spat with Donald Trump. Despite the turmoil, experts say that the board will likely not take action against Musk.
Musk recently engaged in a heated exchange with Trump on social media, criticizing his budget and making claims about government documents involving convicted sex offender Jeffrey Epstein. The feud has had significant consequences for Tesla, including a 14% drop in shares and estimated losses of $150 billion for shareholders.
Many experts believe that a board like Tesla’s, which is heavily influenced by Musk due to his control over the company, would likely not dismiss him despite the public backlash. “They should,” said Charles Elson, founding director of the Weinberg Center for Corporate Governance at the University of Delaware. “But they won’t.”
The reason behind this inaction lies with Musk’s dominant role as a controlling shareholder and his close ties to board members. The directors are also paid handsomely, which raises concerns about their independence.
In recent months, there were signs that Tesla’s directors were taking control over the company’s governance more seriously. However, these efforts appear to have stalled, with the board denying reports of searching for a successor and dismissing Denholm’s claims as “absolutely false.”
Experts say that shareholders would face significant challenges in removing Musk from his position. To do so, they would need to own at least 3% of the company’s shares, but governance laws make it extremely difficult for them to succeed.
In conclusion, while Elon Musk’s behavior has raised concerns about the board’s role and independence, experts predict that nothing will change. The Tesla board appears to be in a position where it cannot afford to risk its value by taking action against Musk, making it unlikely that he will be removed from his position despite the public fallout.
Source: https://fortune.com/2025/06/07/musk-trump-feud-tesla-board-unlikely-take-action-against-ceo-corporate-governance-experts-say