Elon Musk Should Be Enabled to Step Back From Tesla, Investor Says

(Bloomberg) -- One of Tesla Inc.'s largest investors said Chief Executive Officer Elon Musk may better serve the company by being less outspoken.

James Anderson, a partner and portfolio manager at Baillie Gifford & Co., said Tuesday on Bloomberg Television he registered an “extraordinarily unsuccessful” plea in July for Musk to take a more peaceful approach to running the company. The following months, the CEO tweeted he secured funding to take the company private, abandoned that pursuit and then settled a U.S. Securities and Exchange Commission lawsuit.

Around that same time, the electric-car maker also made major progress ramping up production of its Model 3 sedan. As Tesla's largest shareholder after Musk, Anderson said Baillie Gifford feels it's appropriate to discuss -- but not dictate -- whether the CEO's comments help the company achieve its mission. He added that the billionaire should be “enabled to step back from having to feel so driven to comment.”

“You can be in the background,” Anderson said. “I can't remember the last time that Jeff Bezos turned up on a quarterly call, let alone felt the need to talk about analysts, even though I suspect he's got some quite big thoughts about them.”

In a separate interview with Barron's, Anderson said Baillie Gifford wouldn't be against Musk having a different role at the company.

“I don't think he needs to be CEO,” Anderson told Barron's.

Not So Easy

Musk, 47, may not have as much flexibility to step back from the CEO job as Anderson suggested. Tesla gave him a performance award last year valued at $2.6 billion in one of the largest compensation deals in history.

One requirement of the award, which is pegged to sky-high targets for Tesla's market capitalization, revenue and profitability, is that Musk remain either CEO or executive chairman and chief product officer. But the company agreed to prevent him from being chairman for at least three years when it settled the SEC's take-private lawsuit in September.

Tesla fell 3.1 percent to close at $276.54 on Tuesday, the lowest since Oct. 22. The company has lost about $7.5 billion in market capitalization since Musk announced plans to wind down most stores and shift all sales to online-only ordering.

Read more: Musk's plan is said to blindside many Tesla staff

Baillie Gifford holds about 7.7 percent of Tesla shares, according to data compiled by Bloomberg. The Edinburgh-based firm also is one of the bigger investors in the Bezos-run Amazon.com Inc.

--With assistance from Dana Hull.

To contact the reporters on this story: Gabrielle Coppola in New York at gcoppola@bloomberg.net;Ed Hammond in New York at ehammond12@bloomberg.net

To contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Chester Dawson

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