(PatrioticPost.com)- Without providing any examples, billionaire Elon Musk tweeted that those who counsel shareholders on how to vote at shareholder meetings of publicly listed firms have “far too much power.”
It just so happens Musk is defending himself in a San Francisco courtroom against accusations that he deceived investors by tweeting on August 7, 2018. Musk claimed he had “financing secured” to take Tesla private. Musk said in testimony that specific Saudi funders would support his plan to take Tesla Inc. private in 2018 but that the fund changed its mind.
Vivek Ramaswamy, the founder of Strive Asset Management, started a thread in which Musk, the owner of Twitter, responded by stating that it was “staggering” how much influence the largest advisor, Institutional Investor Services, has on U.S. state investors, treasurers, and businesses.
Institutional customers, such as pension funds, get reports from proxy voting firms and advisers like Institutional Investor Services (ISS) and Glass Lewis that recommend how to vote on everything from choosing board members to approving compensation and benefits.
Companies are coming under increased pressure from shareholders to address environmental, social, and governance-related (ESG) challenges, such as climate change, and this has put them in the crosshairs of a rising American movement that is fighting back on these issues.
The stock market is essentially under the authority of ISS and Glass Lewis. Because so much of the market comprises passive/index funds, which delegate shareholder voting choices to them, Musk said that “much too much power is concentrated in the hands of shareholder services’ organizations like ISS and Glass Lewis.”
His remarks, which follow earlier criticism of how investors evaluate the electric car startup Telsa, which Musk owns, from an ESG standpoint, are Musk’s most recent critique of how markets operate.
Musk said at a trial in San Francisco federal court that he met with officials of Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, on July 31, 2018, at Tesla’s Fremont, California, plant.
Musk confirmed that he did not discuss a takeover price with the Saudi fund officials but said that they made it clear they would do whatever was necessary to complete an acquisition.