‘Sad, if not damning’: Cathie Wood blasts the proxy firms who say Elon Musk’s $1 trillion pay package is just too rich

Core Viewpoint - Investor Cathie Wood defends Tesla CEO Elon Musk's proposed $1 trillion pay package, arguing that the financial system enabling resistance to it is flawed, not the company itself [1] Group 1: Proxy Advisory Firms' Influence - Wood criticizes the significant influence of proxy advisory firms like Institutional Shareholder Services (ISS) and Glass-Lewis, which have recommended shareholders reject Musk's pay package during Tesla's upcoming annual meeting [2] - The recommendation from these firms is based on concerns that the pay package would dilute existing investors' shares and grant excessive flexibility to Tesla's board regarding Musk's performance goals [6] Group 2: Index Funds and Voting Power - Wood highlights the problematic relationship between proxy firms and index funds, which control a large number of shares and thus have substantial voting power despite not conducting fundamental research [3][4] - The three largest index funds—Vanguard, State Street, and BlackRock—hold over $2 trillion tracking the S&P 500 and do conduct extensive research for proxy voting decisions, contradicting Wood's assertion that index funds do no research [5] Group 3: ARK Invest's Position - Wood suggests that ISS and Glass-Lewis fail to recognize Tesla's potential, indicating a need to reconsider the voting power of index funds [7] - Tesla is a significant holding in ARK Invest's flagship ARK Innovation ETF, comprising about 12% of its $8 billion portfolio [7]