Vanguard vote FOR Elon Musk’s Tesla pay package ratification

$Tesla(TSLA.US)$ $BYD COMPANY(01211.HK)$ $NIO Inc(NIO.US)$ $XPeng(XPEV.US)$ The article reported that Vanguard, Tesla’s second-largest shareholder behind CEO Elon Musk, detailed its decision to ratify his $56 billion pay package in a pamphlet released on Friday by the investment advisor.

My Take: Vanguard provides 3 reasons:

1. Significantly outperform the market
“In our 2024 analysis of the performance award, which would grant Tesla’s CEO approximately 300 million options (adjusted for stock splits since the initial grant date) given the achievement of a series of performance conditions, we noted that the company’s performance and associated shareholder returns since 2018 have significantly outperformed the market and have been positive outliers.”
2. Return in 98th percentile of all Russell 3000 companies
It also noted the total shareholder return was in the 98th percentile of all Russell 3000 companies from 2018 to 2023. “There are few companies that have created as much absolute market value appreciation as Tesla.”
3. Executives and board members convinced Vanguard
“To further inform the funds’ voting decisions, we met with Tesla executives and board members. During our engagement, board members reinforced their conviction regarding the importance of retaining the CEO and highlighted that the plan’s five-year post-exercise holding requirement maintains the alignment of the CEO’s economic interests with the company’s shareholder base.”