UPDATE: Cathie Wood, CEO of ARK Invest, asserts that Elon Musk’s controversial $1 trillion compensation plan will pass overwhelmingly during the shareholder vote scheduled for November 6. This comes despite pushback from influential proxy advisory firms and index funds that have urged shareholders to reject the deal.
In a post on X, Wood expressed her confidence that Musk’s pay package will receive a “decisive” victory, highlighting that Tesla’s increasing influence in the market—now constituting 2.4% of the S&P 500—will mitigate opposition from institutional investors.
The proposed compensation plan, which could be the largest in corporate history, would reward Musk with up to $1 trillion in stock based on ambitious performance targets. These include reaching a staggering $8.5 trillion market valuation by 2035 and achieving 12 operational milestones, such as selling 12 million cars and launching one million robotaxis.
Wood challenged critics, particularly targeting proxy firms like Institutional Shareholder Services (ISS), which have recommended against the proposal. She expressed concern over the reliance of institutional investors on such firms for voting guidance, labeling it a “broken” aspect of the investment system. “Isn’t it sad, if not damning, that institutional shareholders rely on proxy firms to tell them how they should vote?” Wood questioned.
“Retail investors are likely to dominate the vote once again,” she stated, adding, “America!”
The implications of this vote are substantial. Should the package pass, Musk’s ownership stake in Tesla could soar from 13% to nearly 29%, greatly enhancing his control over the company as it pivots further into AI, robotics, and autonomous driving technologies.
The stakes are high, as Tesla’s board has warned that a rejection of the deal could lead Musk to curtail his involvement with the company, or potentially exit entirely. Wood’s steadfast support for Musk and his vision for Tesla underscores her belief in the transformative potential of the electric vehicle industry.
As the vote approaches, the spotlight will be on how retail investors respond to the plan, potentially countering the institutional backlash. With the clock ticking, all eyes are on Tesla and its shareholders as they prepare for what could be a historic decision in corporate governance.
This developing story is one to watch closely as it unfolds in the coming days, with implications that could reverberate throughout the tech and investment communities.
