Tesla needs to find a successor in case Elon Musk's health fails, activist investor says

Tesla shareholders need
Elon Musk to start identifying potential successors, Ross Gerber says.
Reuters

Ross Gerber is a longtime Tesla bull who’s campaigning for a seat on the EV maker’s board.
Shareholders need Elon Musk to find potential successors in case his health declines, he said in a recent interview.
“Many of Elon’s fans seem to think he’s not human – and I disagree,” Gerber told Insider.

Tesla shareholders need Elon Musk to start looking for his potential successor as CEO given the huge levels of stress he’s under, according to a major investor in the EV maker.

Musk is the chief executive of three companies at once — Tesla, Twitter and SpaceX — and there’s a risk that continuing to juggle those roles could lead to a decline in his health, Ross Gerber told Insider.

That’s why activist investor Gerber says he’s making succession planning a key part of his campaign for a seat on Tesla’s board.

“Many of Elon’s fans seem to think that he’s not human — and I disagree,” Gerber said in an interview last week. “This enormous level of stress is bad for his health.”

“Am I getting the best out of my CEO at Tesla, when he’s working 24/7 at three companies?” 

“I’m worried about his wellbeing and health, regardless of how Tesla is performing.”

While they have since rebounded sharply, Tesla shares suffered a record plunge in 2022, in part because its shareholders were fretting about Musk being distracted by the challenges of running Twitter. Musk bought the social media giant for $44 billion in October and said last week that he plans to be its CEO until late 2023. 

Musk himself has acknowledged the toll on his wellbeing, saying he had been having “quite severe back pain” when taking the stand for the Tesla shareholder lawsuit in January.

The 51-year-old  billionaire tech boss said he “wouldn’t wish that pain on anyone,” when he disclosed his punishing schedule while working on saving Twitter from bankruptcy and has previously acknowledged frequently logging 120-hour work weeks and not leaving Tesla’s factory for days at a time.

Gerber, whose wealth management firm owned about 440,000 Tesla shares or 0.01% of the company at the start of 2023, announced he’d be running for a board seat as a “friendly activist” last week. He has support from Tesla’s third-largest shareholder, Leo KoGuan.

He said he decided to run for Tesla’s board after seeing the carmaker’s organizational chart in The Information and realizing that most of its top executives didn’t even have professional headshots. To him, that suggested a lack of potential CEO candidates if Musk were to step down.

“I realized that people know more about the leadership of ISIS than they do about the leadership of Tesla,” he said. “I approached the company about trying to resolve this, and I just have not gotten anywhere.”

“When Elon announced that he wouldn’t come back to being Tesla’s full-time CEO anytime soon, I felt like it was time to step up,” Gerber added.

As well as succession planning, Gerber is pushing for better customer service and communication as part of his Tesla board seat campaign.

Many Tesla owners complain about poor customer service. Gerber said that some get in touch with him directly when they have an issue with their car, because they can’t reach anyone who works for the automaker.

He also wants Tesla to run more TV ad campaigns and beef up its crisis PR department, so it can respond better to controversies like last week’s recall of 362,000 self-driving cars.

“They need to start addressing reality,” Gerber said. “If they want to be like Apple, if they want to become a $2 to $3 trillion company, they need to start acting like it — and that’s what I’m really pushing the board to do.”

Read more: Tesla activist investor says he’s a huge supporter of Elon Musk but warns his lifestyle is unsustainable