Elon Musk spars with investors who want independent Tesla board

Tesla CEO Elon Musk sparred this week with a group of investors who called on the company to appoint more independent members to its board of directors.

The billionaire entrepreneur and innovator said on Twitter the investors "should buy Ford stock" because "their governance is amazing," in a coy reference to the fact that the Dearborn, Mich.-based automaker remains controlled by heirs of founder Henry Ford.

Musk's remarks came after the investors issued a public letter Monday praising Tesla's "phenomenal growth" but assailing the Palo Alto, Calif.-based company for "the conflicts of interest that permeate this board."

"Five of six current non-executive directors have professional or personal ties to Mr. Musk that could put at risk their ability to exercise independent judgement," the investors wrote. "A thoroughly independent board would provide a critical check on possible dysfunctional group dynamics, such as groupthink."

The investors who signed the letter include New York City's asset managers, public pension plans in Connecticut and California and private firm CtW Investment Group.

Related:

Tesla briefly edges General Motors as most valuable U.S. automaker

In separate tweets, Musk suggested that he's already recognized the need to bring two more independent voices on the company's board, which currently includes his brother, Kimbal, and other close supporters.

"Besides, I already said we'd add more independent members," after the company acquired SolarCity, he said. "Will announce soon, but this group has nothing to do with it."

The spat comes as Tesla briefly passed General Motors as the nation's most valuable automaker when measured by total stock value. That occurred on Monday.

The investment group cited several looming challenges as reasons to add more independent directors, including Tesla's consistent losses, the start of battery production at a plant in Nevada, the integration of SolarCity and the task of launching production of its Model 3 mass-market electric vehicle. The group also called on Tesla to elect all of its directors annually instead of on a staggered basis.

"As Tesla evolves from a pure electric vehicle producer to a clean energy company, the board’s makeup needs to change to reflect its new business focus," the investors said.

Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.