ARK Invest's CEO, Cathie Wood, firmly believes that Tesla's substantial compensation package for its CEO, Elon Musk, will receive a definitive endorsement from shareholders during the upcoming meeting. This confidence persists despite objections raised by influential advisory bodies. Wood emphasizes Tesla's growing presence within the S&P 500, suggesting it will be a pivotal factor in securing the vote. She also critiques the practice of institutional investors relying heavily on proxy advisory firms, labeling index-based investing as a form of 'socialism.'
Tesla's CEO Compensation Package Poised for Approval Amidst Debate
In a recent development on October 20, 2025, ARK Invest CEO Cathie Wood publicly expressed her conviction regarding the inevitable approval of Elon Musk's multi-billion dollar compensation package for Tesla. Her remarks, shared on the social media platform X, directly addressed the opposition from International Shareholder Services (ISS), which recommended that shareholders vote against the package. Wood recalled the 2018 shareholder vote, noting that Musk's previous pay package passed decisively when Tesla held a smaller market presence. She pointed out that Tesla's current weighting in the S&P 500, at 2.4%, is significantly higher than the 1.2% it held during a contentious second vote, initiated by a Delaware judge. This increased weight, she argued, would prevent index funds from swaying the outcome against Musk. Wood further criticized ISS's influence, stating it was 'sad, if not damning' that institutional shareholders defer to proxy firms for voting guidance, especially given that many index funds do not conduct their own fundamental research. She controversially labeled index-based investing as a 'form of socialism.'
Musk himself has defended the package against detractors, highlighting Tesla's market capitalization, which he claims surpasses all other automakers combined. Echoing Wood's sentiment, Wedbush Securities' analyst Dan Ives, a prominent Tesla supporter, also predicted the pay package's approval at the forthcoming shareholder meeting. Ives indicated that the vote would likely occur alongside an anticipated investment in Musk's artificial intelligence venture, xAI, underscoring a broader strategic alignment among key stakeholders.
This situation underscores the complex dynamics at play when executive compensation intersects with corporate governance, investor influence, and the broader market perception of a company's leadership. The strong support from figures like Cathie Wood, despite external advisory opposition, highlights a belief in Musk's continued value to Tesla's innovation and market trajectory. It also brings to light the ongoing debate about the role and impact of proxy advisory firms versus the direct assessment and decision-making capabilities of institutional investors.