State Controller of California
Sacramento, CA
Re: Divestment from Tesla, Inc.
Dear Controller Cohen,
The National Institute for Workers’ Rights and LatinoJustice PRLDEF write to follow up on our letter of October 15, 2024, asking you to divest CalPERS from Tesla because of its CEO’s assault on diversity, equity and inclusion, and now on American workers across the board.
As we feared, Elon Musk has used his position as the President’s largest campaign donor and the owner of a powerful communications platform to help the Administration attack a principle critical to Americans’ lives: being treated fairly at work. He has done this both by helping to turbocharge the Administration’s attack on American civil rights law[i] and by firing workers across the federal government without rhyme or reason.[ii] This has been ruinous for the Tesla brand and therefore its stock price. As a major Tesla shareholder, you have the power to stop it. And we write to ask you to do so.
Indeed, another major Tesla shareholder — the NYCERS – recently indicated they would be bringing a shareholder action to recover for the loss to worker pensions caused by Musk’s damage to the Tesla brand.[iii] The American Federation of Teachers has also recently asked asset managers to review their Tesla investments and take steps to protect current and future retirees.[iv]
We ask you to either divest or take such action as well. Because if Tesla’s Board of Directors realizes that the company will be on the hook for the loss in shareholder value, they may rethink their strategy of allowing their CEO to abdicate his job duties and wreak havoc on American workers and our country’s ability to keep us safe and secure.
Your Tesla Ownership Gives You An Opportunity To Stop DOGE Destruction and Protect Workers’ Retirement. Your extensive holdings of Tesla shares make you one of a handful of individuals and organizations who can stop the damage Musk is causing to American workers and the principle of fairness in the workplace—simply by doing your fiduciary duty to maximize fund value. When we wrote you last October, you might have thought that owning Tesla was beneficial to the fund’s bottom line. That is no longer true.
As you know, since December of 2024, Tesla’s stock has fallen 55%, costing the workers you represent millions.[v] Tesla is estimated to have lost about 10% of its future customer base globally because of brand issues “self-inflicted by Musk.”[vi] Protests are mushrooming across the United States and Europe.[vii] Investment analysts note the excessive price-to-earnings ratio that often signals a stock’s overvaluation.[viii]
To protect the workers and retirees of California who depend on this pension money, we ask that you seriously consider one of two things: divest from Tesla before the stock falls further, or bring a shareholder action like the one contemplated by NYC Comptroller’s to recover losses for the fund. Either will have the effect of pressuring Tesla’s Board to get their CEO to actually do his job of maximizing Tesla’s shareholder value, and stop his effort to undermine fairness in the workplace and our nation’s ability to keep us safe and secure.
Thank you for your consideration.
Sincerely,
Jason Solomon
Director
National Institute for Workers’ Rights
Lourdes M. Rosado
President & General Counsel
[i] See Rebecca Klar, DOL Contractor Watchdog Plans to Cut Staff by 90%, Memo Says, Bloomberg Law (Feb. 27, 2025) https://news.bloomberglaw.com/daily-labor-report/dol-contractor-watchdog-directed-to-cut-staff-by-90-memo-says (OFCCP, responsible for ensuring federal contractor compliance with antidiscrimination law, facing 90% staffing cuts); Jonah Owen Lamb, Tesla discrimination probe killed as Trump axes watchdog agency, The San Francisco Standard (Feb. 6, 2025) https://sfstandard.com/2025/02/06/trump-order-stops-tesla-discrimination-investigation/ (Before cuts, OFCCP had been slated to audit Tesla for antidiscrimination compliance); Fatima Hussein, IRS plans to cut up to 25% of staff, starting with closing its civil rights office, AP sources say, AP News (April 4, 2025) https://apnews.com/article/irs-layoffs-civil-rights-compliance-trump-musk-d2c5708973cddf91c1a72b392118628c; Jodi S. Cohen and Jennifer Smith Richards, Massive Layoffs at the Department of Education Erode Its Civil Rights Division, ProPublica (March 12, 2025) https://www.propublica.org/article/education-department-civil-rights-division-eroded-by-massive-layoffs.
[ii] See Andrea Hsu, They had left their DEI roles. Trump still fired them. NPR (April 7, 2025) https://www.npr.org/2025/04/07/nx-s1-5348922/trump-dei-federal-employees-firing; Katherine Tangalakis-Lippert and Jack Newsham, DOGE’s anti-DEI drive flagged these programs. Only they weren’t DEI, Business Insider (Mar. 11, 2025) https://www.yahoo.com/news/doges-anti-dei-drive-flagged-031009875.html.
[iii] Jeffery C. Mays, New York City Pension Funds Plan to Sue Tesla Over Musk’s DOGE Leadership, New York Times (April 1, 2025) https://www.nytimes.com/2025/04/01/us/nyc-pension-funds-elon-musk-doge.html.
[iv] Andrew Ross Sorkin, Ravi Mattu, Bernhard Warner, Sarah Kessler, Michael J. de la Merced, Lauren Hirsch, and Edmund Lee, A Union Takes On Musk via Tesla‘s Stock, New York Times (Feb. 27, 2025) https://www.nytimes.com/2025/02/27/business/dealbook/aft-teachers-union-musk-tusk.html.
[v] Caroline Petrow-Cohen, Tesla shares drop amid auto tariffs and ‘brand crisis’, Los Angeles Times (April 7, 2025) https://www.latimes.com/business/story/2025-04-07/tesla-stock-drop-elon-musk-trump-ev-market-doge.
[vi] Id.
[vii] Dara Kerr and Edward Helmore, Protests hit Tesla dealerships across the world in challenge to Elon Musk, The Guardian (Mar. 29, 2025) https://www.theguardian.com/world/2025/mar/29/tesla-protests-elon-musk-doge.
[viii] Chris Kirkham, Tesla’s stock defied gravity for years. Is Elon Musk’s EV party over?, Reuters (Mar. 10, 2025) https://www.reuters.com/business/autos-transportation/teslas-stock-defied-gravity-years-is-elon-musks-ev-party-over-2025-03-10/.
