Musk tweets proxy voting firms have ‘far too much power’

By Simon Jessop and Ross Kerber

January 24, 2023

Jan 24 (Reuters) – Billionaire Elon Musk said in a tweet that advisers that make recommendations to shareholders on how to cast their votes at company meetings had too much power because of their influence on passive investment funds.

Musk’s comments add to a long-running debate over whether such advisers have too much sway over corporate decision-making.

In a tweet late on Monday Musk said: “Far too much power is concentrated in the hands of ‘shareholder services’ companies like ISS and Glass Lewis, because so much of the market is passive/index funds, which outsource shareholder voting decisions to them.”

ISS, or Institutional Shareholder Services, declined to comment. Glass Lewis also declined to comment.

Proxy advisers led by ISS and Glass Lewis give recommendations to clients such as pension schemes on how they should vote on everything from electing board members to signing off on executives’ pay and perks.

Musk, who owns Twitter and heads electric carmaker Tesla, (TSLA.O), was replying to a Twitter thread begun by Vivek Ramaswamy, the founder of Strive Asset Management, who said it was “staggering” how much influence the biggest adviser, ISS, had on U.S. state investors, treasurers and companies.

Read the full article on Reuters here.