Ark Invest founder, Cathie Wood, has voiced her continued support for Tesla CEO Elon Musk. Wood went public on X to criticize the proxy advisory firms and a Delaware court’s decision to void Elon Musk’s multibillion-dollar pay package.
In a post on X, Wood described the influence of proxy firms on shareholder votes as “sad, if not damning,” arguing that index funds “do no fundamental research” and yet they “dominate institutional voting.”
Wood renews her support for Elon Musk
Ark Invest founder and CEO Cathie Wood has renewed her defense of Tesla CEO Elon Musk’s multibillion-dollar pay package. She has also spoken against institutional investors and proxy advisory firms for opposing it.
“Index-based investing is a form of socialism,” she wrote, adding that the investment system in the U.S. is broken. Her posts are in response to a post from Ark Invest promoting an episode of The Brainstorm, the firm’s video series, in which Wood urged the appeals court handling Musk’s case to “do the right thing.”
In January when Musk’s 2018 pay package, initially valued at around $56B, was voided by a Delaware Chancery Court after a shareholder lawsuit argued that the board had failed to act independently in approving it, Wood criticized the decision calling it “un-American.”
‘Retail investors will dominate the vote once again’
In a follow-up post made on Sunday, Wood emphasized that Tesla’s growing presence in major stock indexes would not necessarily alter the outcome of a new shareholder vote on Musk’s compensation.
“When shareholders first voted on @elonmusk’s 2018 pay package, #Tesla was not in any index, and the pay package won decisively,” she said. “In the second vote, forced by an activist Delaware judge, $TSLA was 1.2% of the S&P 500, and the pay package won decisively. Now $TSLA is 2.4% of the S&P 500, not enough for index funds to swing the vote, and I believe that Elon’s new package will win decisively.”
Wood acknowledged that Institutional Shareholder Services (ISS), one of the most influential proxy advisory firms, had recommended voting against the package.
“Although the proxy firm ISS has recommended against the package, retail investors are likely to dominate the vote once again. America!” she wrote.
Tesla is currently preparing for another round of shareholder deliberations following the Delaware court’s ruling. The outcome could determine whether Musk receives the full performance-based compensation package originally approved in 2018, which ties his earnings to Tesla’s market capitalization and operational milestones.
Other Musk’s supporters also view the legal challenge as an attack on innovation. They argue that Musk’s leadership has been an important factor in Tesla’s transformation into one of the world’s most valuable companies.
The opposing side argues that the original compensation plan was excessive and that Tesla’s board failed to uphold its fiduciary duty. Critics have also questioned Musk’s growing portfolio of ventures, including SpaceX, Neuralink, and X suggesting that his divided attention justifies closer scrutiny of his compensation.
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Source: https://www.cryptopolitan.com/ark-invest-cathie-wood-backs-musk-tesla/
