Danish pension fund AkademikerPension announced Friday that it plans to sell its remaining 200 shares of Tesla Inc. stock and add the company to its exclusion list, unless changes—including approval of a shareholder proposal regarding labor right—occur.
The fund cited “labor rights and management” among the problems it has with the company, including board independence. In addition, it stated: “[Tesla CEO] Elon Musk’s actions create increased return risk.”
CEO Jens Munch Holst, according to a translated version of a statement from the pension fund, said of the decision: “It’s no secret that Tesla has been a market leader in the green transition for years. But when we can tick off a long list of problems year after year with no prospect of any improvement—in fact, quite the opposite—it’s hard to argue that we should remain invested.”
The fund statement offered three reasons for deciding to exclude the electric vehicle maker from its holdings:
- Tesla has “worked against employees’ labor rights for years and has a long history of union resistance and discrimination in the workplace”;
- “Tesla has major challenges regarding board independence and is by far the mega-cap stock with the least independence on its board, which literally consists of friends and family”; and
- “It is impossible to talk about Tesla without talking about Elon Musk. He is the definition of Tesla. But recently he has increasingly interfered in American and European politics. He has publicly supported controversial political figures, spread misinformation and criticized governments. This has created major risks to returns, as many investors and customers have turned their backs on the company. In short, Elon Musk is, in our opinion, destroying the brand and the value.”
The fund held out a “theoretical possibility” that it might cancel the exclusion, if Tesla’s board, at its June annual general meeting, were to support a shareholder proposal from the pension fund regarding employees’ rights to form and join a union.
“We do not have high expectations that the proposal will be voted through, so the exclusion is ready in the drawer, but the Tesla board of directors will have one last chance to change our position,” Munch Holst said in the statement. “It is no secret that we are big advocates of active ownership. And we have been trying for years to get the company to make some of the changes that we find necessary. But sometimes you have to realize that the desired change is too far away or there is no prospect of it. And that is the situation with Tesla, we assess.”
AkademikerPension is a member-owned pension fund for academics. It manages a total portfolio of 145 billion kroner ($21.15 billion) for 174,500 members.
Tags: AkademikerPension, Elon Musk, Jens Munch Holst, Shareholder Activism, Tesla