Shareholders, spearheaded by activist investor Tulipshare, have launched a campaign to tie Elon Musk’s salary to Tesla’s environmental, social and governance (ESG) performance.
The announcement comes months after the electric vehicle (EV) powerhouse was booted from S&P’s ESG index.
According to Tulipshare, tying the chief executive’s salary to ESG would ensure the company improves its sustainability while delivering a stronger performance to investors.
Currently, Musk’s pay is tied to Tesla’s performance and that has led to an increase in investors’ returns.
“Facing multiple lawsuits because of its lack of ESG focus, it is time that investors – including retail investors – hold Tesla’s CEO accountable,” said Antoine Argouges, chief executive of London-based Tulipshare.
“This will not only deliver better profits in the long-term but will ensure the company can deliver on its mission to accelerate the world to a more sustainable world.”
Over the last few months, Tesla has been at the centre of several lawsuits.
Former staff members sued the EV maker in June over “mass layoffs” while a month later fifteen former and current employees alleged they had been subjected to racial abuse and harassment at Tesla’s factories.
The announcement comes as Tesla’s revenue and gross margins for the quarter were below analysts’ forecasts.
Revenue was a record $21.45bn (£19bn) but still down on analysts’ estimates of $21.96bn while gross margins slumped to 27.9 per cent.
The car maker is also expected to miss delivery targets, as it told analysts on Wednesday night that year deliveries would grow less than the expected 50 per cent on 2021 levels.
City A.M. has approached Tesla for comment.