City Comptroller Brad Lander is pushing for the city to file a shareholder lawsuit against Tesla, alleging the automaker misstated how much CEO Elon Musk’s work for the Trump administration has pulled him away from the company.
Lander said that Tesla made material misstatements to shareholders by maintaining Musk is spending significant time on the company despite his job as the head of President Donald Trump’s so-called Department of Government Efficiency, the new entity charged with slashing federal spending. Lander serves at the investment adviser to the city’s five pension funds.
Tesla stock has plunged since Musk has become a nearly ubiquitous figure in Trump’s second presidency, with Americans protesting at its car dealerships and sales falling sharply in Europe. In less than three months, the city’s $285 billion pensions have lost more than $300 million as Tesla stock has lost almost 40%, Lander said.
“Tesla shareholders don’t have a full time CEO paying attention to the company and their interests,” Lander said at a news conference on Tuesday. He is one of roughly a dozen Democrats running to be mayor of New York.
Tesla has drawn a flurry of shareholder lawsuits challenging everything from Musk’s pay package to diverting Tesla resources in his 2022 effort to acquire Twitter Inc. The company has also drawn lawsuits ranging from fatal crashes blamed on the company’s Autopilot system to allegations of racism against workers.
Lander called on the City Law Department, which is authorized to be the legal representative for the pension funds, to back a shareholder lawsuit against Tesla.
A spokesperson for Mayor Eric Adams — who is facing off against Lander and other rivals as he seeks reelection — signaled little interest in pursuing such a lawsuit, saying the comptroller is publicly pushing the city to do so in order to bypass the pensions’ board of directors and attract political attention.
“We also respect the pension boards in place to provide input on matters such as these,” said Liz Garcia, a spokeswoman for Adams. “It’s a shame Comptroller Lander doesn’t share the same respect and is attempting to bypass the boards for political gain.”
Although the mayor and comptroller are members of the pension boards, power resides with trustees representing politically formidable public employee unions. The city’s Law Department is reviewing the possibility of a case, but hasn’t made a decision, according to a person familiar with the matter.
Adams last year was charged by the Justice Department for alleged bribery and campaign finance violations in a lawsuit that was ultimately dismissed.
Prior Actions
The city’s pensions have previously led shareholder campaigns over governance reforms at Tesla. At the company’s 2024 annual meeting, the city pensions and seven other investors urged shareholders to reject Musk’s $47 billion compensation package and vote against the reelection of Musk’s brother Kimbal and James Murdoch, Rupert Murdoch’s son, to Tesla’s board.
In a December 2024 US Securities and Exchange Commission filing, Tesla said it was “highly dependent on the services of Elon Musk” and that he spends “significant time with Tesla.”
“Even as Tesla’s performance is floundering, the board has yet to ensure that Tesla has a full-time CEO who is adequately focused on the long-term sustainable success of our company,” Lander wrote in an SEC filing.
Tesla’s vehicle sales fell 13% last quarter to an almost three-year low, as the carmaker made over its most important model and dealt with international backlash against Musk.
Tesla shares traded down 1% as of 11:15 a.m. New York time on Wednesday, paring declines of as much as 6.4% shortly after the open. Since hitting a record high in the weeks after Trump’s election victory, the stock had plunged 44% as of the close Tuesday.
