The Advisors' Blog

As you may have read, Tesla shareholders approved an up-to-$1 trillion performance award for Elon Musk at the company’s annual meeting last week. The company’s proxy statement describes the award – and the voting results are detailed in this Form 8-K that the company filed on Friday.

This newsletter from Andrew Droste parses the percentage support – and also shows how the voting outcomes would have changed if insider holdings were excluded from the calculation. Here’s an excerpt, which shows that the pay-related proposals would have passed either way:

– Proposal 2: Say-on-Pay – 78.2% actual result, with insiders / 69.2% hypothetical result, without insiders

– Proposal 3: A&R 2019 Equity Incentive Plan – 78.7% actual result, with insiders / 69.8% hypothetical result, without insiders

– Proposal 4: 2025 CEO Performance Award – 76.7% actual result, with insiders / 66.9% hypothetical result, without insiders

Tesla put on a full-court press for this meeting – you can see the numerous “additional soliciting material” submissions on the company’s Edgar page, which are a master class in using social media to bring in the vote. Here’s one of my favorites. This Business Insider article recaps:

Starting from September, Tesla ran ads across Facebook, Instagram, X, and Google that told shareholders they “must retain and incentivize Elon” and that “transformative growth” starts with “aligning CEO pay with shareholder value.”

The board also aired an ad on Paramount+ urging shareholders to vote in alignment with the board’s recommendations, concluding with “the future of Tesla is in your hands.”

Those efforts paid off, overcoming negative recommendations and voting decisions by ISS, Glass Lewis, Norges, CalPERS, and other pension funds. In addition to the magnitude of the award, the Business Insider article notes that there were concerns that it incentivizes outsized risks in building autonomous vehicles. But as this WSJ article shows, other funds voted in favor.

– Meredith Ervine