Tesla CEO calls proxy advisory firms ‘corporate terrorists’

Tesla (TSLA) CEO Elon Musk called proxy advisory firms ISS and Glass Lewis “corporate terrorists” after they opposed a historic $1T pay package proposed by the company’s board on the company’s earnings conference call. “The point is…there needs to be enough voting control to give a strong influence, but not so much that I can’t be fired if I go insane. But — and I think that sort of number is in the mid-20s approximately….So it’s just — like I said, I just don’t feel comfortable building a robot army here and not — and then being ousted because of some recommendations from ISS and Glass Lewis who have no freaking clue…I mean those guys are corporate terrorists. And the problem — so let me explain like the core problem here is that so many of the index funds, the passive funds vote along the lines of whatever Glass Lewis and ISS recommend. Now they have made many terrible recommendations in the past that if those recommendations have been followed, would have been extremely destructive to the future of the company. But if you’ve got passive funds that essentially defer responsibility for the vote to Glass Lewis and ISS, then you can have extremely disastrous consequences for a publicly traded company if too much of the publicly traded company is controlled by index funds. It’s de facto controlled by Glass Lewis and ISS. This is a fundamental problem for corporate governance because they’re not voting along the lines that are actually good for shareholders”