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Key takeaways
- A big vote on Elon Musk’s pay is scheduled for today. Schwab Asset Management and the Florida State Assembly are among those supporting Tesla’s board proposal, while Norway’s sovereign wealth fund and the New York State Common Retirement Fund oppose it.
- Prediction market bettors across Polymarket, Kalshi, and Robinhood are showing near-certain odds that shareholders will approve Musk’s pay package.
Tesla’s fate — or at least the answer to the question of whether CEO Elon Musk stays or goes — could depend on today’s shareholder vote.
A preliminary tally of this year’s 14 proposals, which include giving Musk greater control over Tesla (TSLA) as well as a $1 trillion pay package, is expected after a meeting scheduled to begin at 3 p.m. Central time. The final tally will likely come within a few days and will be filed with the Securities and Exchange Commission.
Although shareholders voted with Tesla to approve Musk’s previous compensation deal on more than one occasion, the days leading up to today’s shareholder vote were filled with tension. The electric car company with ambitions in robotics and artificial intelligence has made clear its position that it will be lost without Musk at the helm, and that the incentives it recommends are needed to retain him.
“We believe Elon’s singular vision is essential to getting through this critical turning point,” Robin Denholm and Caithlin Wilson Thompson, members of the Tesla Board of Directors Special Committee, wrote in a letter to shareholders.
Counterpoint Global, an investment team within Morgan Stanley Investment Management, as well as the Florida board and Schwab Asset Management, said they intend to cast votes in favor of Musk’s compensation package.
Why does this matter to you?
Whether Tesla shareholders vote for or against Musk’s compensation plan, the vote has revived debate over key people’s risks as well as corporate governance practices. High-profile investor groups with large stakes in the company’s stock have taken both sides of the issue this time, although bettors on prediction markets overwhelmingly expect Musk to get his way.
On the other hand, major proxy consulting firms Glass Lewis and ISS advised shareholders to vote against the compensation package, citing dilution and lack of risk mitigation for key people. Norway’s $2 trillion sovereign wealth fund revealed earlier this week that it voted against the wage package for these and other reasons. The New York State Common Retirement Fund said earlier this month that it planned to vote against it, and urged others to do the same.
The trillion-dollar vote attracted bettors across prediction markets Polymarket, Kalshi, and Robinhood — all of which overwhelmingly indicated an expectation — 90% or higher — that Musk’s pay deal would pass.
Tesla shares rose about 4% on Wednesday, closing at about $462 to leave them up about 14% for the year.
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