New York: As Tesla’s major shareholders remain divided over Elon Musk’s proposed $56 billion compensation package, the electric carmaker is turning to retail investors, who represent a significant portion of its ownership base, for crucial support.
Small investors, although inclined to favor management, often neglect to cast their votes, presenting a challenge for companies like Tesla.
The upcoming June 13 annual meeting holds substantial weight as it serves as a referendum on Musk’s leadership, particularly following a Delaware court’s rejection of the substantial pay package. Tesla is seeking investor approval to reaffirm the proposal, with Musk poised to control over 20% of the company if successful. A rejection could signal uncertainty for Tesla’s future.
In addition to the pay vote, Tesla aims to relocate its incorporation to Texas and re-elect two directors, including Musk’s brother, Kimbal.
While numerous items are up for vote, Tesla’s focus remains on the pay resolution and relocation to Texas. The company has launched an outreach campaign targeting small shareholders through various channels, including a dedicated website, engagement with online influencers, and exclusive factory tours for active voters.
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Although opinions among retail investors vary, experts suggest that Tesla’s CEO-friendly investor base makes them an essential target for garnering support.
Elon Musk recently reported on social media platform X that approximately 90% of retail shareholders who have voted are in favor of both resolutions, including his pay package.
However, retail shareholders typically exhibit apathy towards voting, posing a challenge for Tesla’s campaign.
The theme of fairness to Musk resonates throughout Tesla’s efforts, with Chair Robyn Denholm emphasizing respect and reciprocity in a recent letter to shareholders.
According to data from S&P Global Market Intelligence, approximately 43% of Tesla’s common stock is held by retail investors, the highest among the top 15 S&P 500 companies.
Despite the recommendation from major proxy advisers against ratifying the pay package, Musk still enjoys considerable online support, with influential users rallying behind him.
As Tesla braces for its pivotal annual meeting, the outcome of the vote remains uncertain, with both support and opposition to Musk’s compensation package evident among shareholders.
