Cathie Wood Defends Elon Musk's $1 Trillion Tesla Pay Plan Amid Proxy Firm Opposition

Cathie Wood, CEO of ARK Invest and a long-time Tesla supporter, strongly defends Elon Musk's proposed $1 trillion Tesla pay package despite significant opposition from influential proxy advisory firms such as Institutional Shareholder Services (ISS) and Glass-Lewis. Wood criticizes the outsized influence of these proxy firms and large index funds, arguing that the financial system enabling their sway over shareholder votes is fundamentally broken, especially given that index funds do not conduct fundamental research yet dominate institutional voting. The pay package, which would increase Musk's ownership from about 13% to 29% of Tesla, faces criticism for potential share dilution and granting excessive flexibility to Tesla's board regarding performance goals, but Wood believes the package will win decisively in the upcoming shareholder vote. Tesla's board warns that rejecting the package could risk Musk reducing his involvement or leaving the company, emphasizing that Musk's compensation only materializes if Tesla's stock price and operational milestones are met, aligning his interests with shareholders. Wood also highlights that despite Tesla's growing presence in major stock indexes, retail investors and existing supporters likely will influence the vote outcome positively. Overall, Wood frames the controversy as a broader critique of the current investment system rather than a reflection on Tesla or Musk's leadership.