Musk’s army of small investors applauds apparent approval of Tesla’s $56 billion pay package

By Abhirup Roy

SAN FRANCISCO (Reuters) – Elon Musk’s army of small investors allied with him took a victory lap in supporting his $56 billion pay package after the Tesla (TSLA) CEO said shareholders were voting to approve it at a wide margin, despite opposition from large institutions. .

Family investors, who hold an unusually large stake in the electric vehicle maker, are typically apathetic about voting.

But in a rare show of support, many have been campaigning on social media for weeks to have the billionaire CEO’s salary reinstated after a Delaware judge overturned it in January because he found Musk had improperly controlled the process.

“An attempt to destroy Tesla thwarted by retail shareholders,” Omar Qazi said in a post on social media platform X following Musk’s update. “Tesla is safe,” said Qazi, who posts on @WholeMarsBlog and has more than 476,000 followers.

The EV market leader is expected to make an official announcement about the voting result at its annual general meeting, which begins at 4:30 pm EDT (2030 GMT) on Thursday.

Institutional investors appeared divided on the issue. While some supported Musk’s pay, others, such as the California Public Employees’ Retirement System and proxy firms Glass Lewis and Institutional Shareholder Services, urged shareholders to reject the pay package as excessive compensation.

“When both institutions and proxy advisory firms lean in one direction, it is very rare for the vote to go the other way,” John Lawrence, a partner at law firm Baker Botts, told Reuters. “It shows, in this case, the company’s understanding of the power of social media.”

Support from retail investors, along with support from some large institutions, was key in swinging the vote in Musk’s favor, a source familiar with the preliminary count told Reuters.

‘WE HAVE YOUR BACK’

Musk enjoys a global fan base for transforming Tesla from a startup into a multibillion-dollar giant and for innovation at his other companies, including rocket maker SpaceX. But standing up to powerful investors who voted “no” to the pay package required more than just a fan base.

Social media has been buzzing for weeks with many users, like Alexandra Merz, who posts on Platform X as @TeslaBoomerMama, calling on people to vote. The efforts have led some banks and brokerages outside the U.S. to allow Tesla investors to vote, which had not previously happened.

“Don’t mess with Tesla retail shareholders,” Merz posted on Thursday, thanking people who voted. “Your votes will help remedy a true injustice.”

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Musk himself has also been actively seeking support with regular social media posts. He created a separate website to educate investors about the proposals, which also included reincorporating the company in Texas, and how to vote.

The company’s board sent regular letters to shareholders highlighting Musk’s importance at Tesla and alluding to the risks of losing their interest if the salary package was rejected. Musk even offered tours of the Tesla factory to some investors who voted.

The plan worked. About 90% of retail investors who voted were in favor, Musk said in an X post over the weekend.

The approval is critical as Musk faces an uphill legal fight to convince the Delaware judge, who said Tesla’s board was “beholden” to him, while Tesla is also potentially filing new lawsuits during the latest vote. Still, small investors assured their continued support.

“Shareholders have spoken again and we hope our votes can now officially count,” X user Alicia said in a post. “@elonmusk, we have always believed in you and will continue to do so. We have your back!”

(Reporting by Abhirup Roy in San Francisco; additional reporting by Greg Roumeliotis; editing by Matthew Lewis)