Source – Arab News
Small Investors Rally Behind CEO Despite Institutional Opposition
Elon Musk celebrated a significant victory on Thursday as Tesla’s CEO secured a crucial shareholder vote in favor of his $56 billion pay package, overcoming resistance from major institutional investors. Despite typically low engagement in voting, small retail investors, who hold a significant portion of Tesla’s shares, rallied behind Musk in an unprecedented show of support.
Retail Investors Drive Momentum
At the shareholder meeting held at Tesla’s Austin factory in Texas, Musk expressed gratitude to his supporters, proclaiming, “We have the most awesome shareholder base. Hot damn, I love you guys,” amidst applause from the assembled crowd. The vote, which reinstated Musk’s pay package after a Delaware judge previously voided it in January, underscores the active participation of retail investors in shaping Tesla’s future.
Omar Qazi, known on social media as @WholeMarsBlog, highlighted the impact of Tesla’s retail shareholders, noting, “They vote. They tell their friends. It’s not just about investing. It’s a movement.” This grassroots mobilization played a pivotal role alongside partial backing from institutional investors in tipping the scales in Musk’s favor.
Institutional Divide
While some institutional investors supported Musk’s pay structure, others, including the California Public Employees’ Retirement System and proxy advisory firms Glass Lewis and Institutional Shareholder Services, criticized the compensation as excessive and urged shareholders to vote against it. Despite this divide, Musk’s outreach efforts and social media influence proved decisive in swaying the vote.
John Lawrence of the law firm Baker Botts commented on the rarity of such outcomes, noting, “When both institutions and proxy advisory firms lean in one direction, it’s very rare for the vote to come out the other way. It shows in this case the company’s understanding of the power of social media.”
Social Media Mobilization
Social media platforms played a crucial role in galvanizing support for Musk’s pay package. Users like Alexandra Merz, posting as @TeslaBoomerMama, actively campaigned for voting participation, prompting international banks and brokerages to facilitate voting for Tesla investors who were previously unable to do so. Merz, who received a standing ovation at the meeting, emphasized the significance of retail shareholders’ votes in addressing perceived injustices.
Musk’s Strategic Campaign
Musk himself engaged extensively on social media, setting up dedicated platforms to educate shareholders on the proposals and the importance of their votes. Tesla’s board underscored Musk’s pivotal role in the company’s success and the risks associated with losing his involvement if the pay package was rejected. Musk’s outreach efforts, including factory tours for supportive investors, further solidified his backing among shareholders.
Despite potential legal challenges ahead, including ongoing disputes with a Delaware judge and potential new lawsuits, Musk’s victory in the shareholder vote marks a significant triumph supported by small investors. “Shareholders have spoken, again, and hopefully now our votes can officially count,” said X user Alicia. “@elonmusk, we’ve always believed in you and will continue to do so. We have your back!”
