Cathie Wood Predicts Elon Musk’s $1 Trillion Pay Deal Will Pass
UPDATE: Cathie Wood, founder of ARK Invest, asserts that Elon Musk’s $1 trillion pay package for Tesla is set to pass its upcoming shareholder vote on November 6, 2023, despite pushback from influential proxy firms.
Wood confidently declared on social media that the compensation plan will achieve a “decisive” victory, dismissing concerns raised by proxy advisory firms and index funds. She emphasized that these entities do not conduct fundamental research and unduly influence voting behavior among institutional investors.
“When shareholders first voted on Elon Musk’s 2018 pay package, Tesla was not in any index, and that deal won decisively,” Wood stated. “Now Tesla is 2.4% of the S&P 500, which isn’t enough for index funds to sway the vote.” Her confidence is based on the belief that retail investors will dominate the upcoming vote.
The proposed compensation package, if approved, could award Musk up to $1 trillion in stock based on performance milestones, including elevating Tesla’s market valuation to a staggering $8.5 trillion by 2035. Key operational targets include selling 12 million cars, deploying one million humanoid robots, and launching one million robotaxis.
Tesla’s board has issued a warning that if the package is rejected, Musk may reduce his involvement in the company or potentially exit altogether. This adds a layer of urgency for shareholders, who may see significant changes in Tesla’s leadership and direction.
Criticism of the deal has come from proxy advisory firms like Institutional Shareholder Services (ISS), which recommended a vote against the package, citing its enormous scale and a lack of sufficient safeguards. Wood refuted these concerns, calling out the influence of proxy firms in shaping investor decisions.
“Isn’t it sad, if not damning, that institutional shareholders rely on proxy firms to tell them how they should vote?” Wood added, highlighting her concerns about the current investment system.
Musk supported Wood’s statements on social media, expressing agreement with her views. The backing from both Wood and Musk underscores their shared vision for Tesla’s future and the ambitious goals set forth in the proposed package.
Wood has been a steadfast supporter of Musk, framing his compensation as a deserved reward for innovation rather than excess. She has criticized legal challenges against his previous pay package, labeling them “un-American” and advocating for the appeals court to uphold Musk’s compensation rights.
If the new package secures approval, Musk’s stake in Tesla could increase from 13% to nearly 29%, granting him significantly more influence as the company intensifies focus on AI, robotics, and autonomous driving technologies.
As the vote approaches, all eyes will be on Tesla’s shareholders. Wood remains optimistic, insisting that the support from retail investors will once again prevail. “America!” she proclaimed, rallying her base for the upcoming decision.
Stay tuned for further updates on this developing story as the date of the vote draws near.
