CalPERS Keeps Tesla Stake After March Review as $1 Trillion Pension Giants Face Divestment Pressure
Updated
Updated · Santa Barbara Edhat · May 19
CalPERS Keeps Tesla Stake After March Review as $1 Trillion Pension Giants Face Divestment Pressure
1 articles · Updated · Santa Barbara Edhat · May 19
March closed-door talks ended with CalPERS leaving its Tesla position unchanged, with board member Kevin Palkki saying the stock remained a top-10 driver of global equity performance and a key climate-transition holding.
Tesla had become a flashpoint after board member Mulissa Willette sought a risk review in September, citing sales declines, self-driving regulatory challenges and volatility under Elon Musk despite the company’s strong long-term returns.
CalPERS and CalSTRS — managing a combined $1 trillion — are also under pressure to divest from Palantir, immigrant-detention operators, ExxonMobil, Chevron and Apollo over Trump-era immigration ties, fossil fuels and labor concerns.
The funds’ staff still resist divestment and related legislation, arguing their roughly 80%-funded status leaves little room to sacrifice returns, even as lawmakers and advocacy groups push for broader disclosure and stricter investment standards.
With Tesla’s profits collapsing nearly 50%, why does CalPERS justify holding the stock for its 'strong performance'?
Are pension funds using opaque private equity deals to secretly finance the fossil fuel projects they publicly oppose?
Can pension funds ethically profit from AI surveillance technology amid growing global human rights allegations?
CalPERS’ 2026 Tesla Decision: Navigating Fiduciary Duty, Divestment Demands, and ESG Risks
Overview
In March 2026, CalPERS chose to keep its significant investment in Tesla, reflecting its established approach to corporate governance and social responsibility. This decision followed earlier actions, such as publicly reviewing serious issues at Tesla and affirming the importance of safe, respectful workplaces. CalPERS also demonstrated active shareholder engagement by voting against Elon Musk’s large compensation package, showing its willingness to challenge management when needed. By integrating ESG factors into its investment oversight and preferring engagement over divestment, CalPERS balanced ethical concerns with its duty to maximize long-term returns for its beneficiaries.