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- Elon Musk stated that proxy advisory firms ISS or Glass Lewis have too many influence.
- He tweeted late Monday, "ISS and Glass Lewis effectively manage the stock market."
- Musk stated that many investors have stocks in passive index funds. This means that shareholder voting decisions are "outsourced to advisories".
Elon Musk stated that proxy advisory firms Institutional Shareholders Services (Glass Lewis) have too much influence over the stock exchange.
These firms make recommendations to shareholders about how they should vote at company meetings on management proposals.
Musk tweeted late Monday that "far too much power is concentrated into the hands of shareholder services' companies such as ISS and Glass Lewis because so much market is passive/index funds which outsource shareholder voting decisions them." "ISS and Glass Lewis effectively have control over the stock market."
He was responding to Vivek Ramaswamy's initial tweet, which stated that ISS held a "staggering amount" of influence over companies and investors.
ISS and Glass Lewis did not immediately respond to our requests for comment.
In 2019, the Securities and Exchange Commission estimated that both proxy advisors controlled 97% of voting advice market.
They supported a proposal to allow investors to nominate more board members, and they urged votes against two Tesla directors.
Although the resolution was passed, the directors remained on board, although with less support than usual.
Glass Lewis and ISS also urged Tesla shareholders in 2018 to reject a proposal for a $2.6 Billion performance-based stock option grant to Musk. The proposal was still approved.
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By: bevans@insider.com (Brian Evans)
Title: Elon Musk says these shareholder advisors ‘effectively control the stock market’ and have too much power
Sourced From: markets.businessinsider.com/news/stocks/elon-musk-iss-glass-lewis-control-stock-market-twitter-tesla-2023-1
Published Date: Tue, 24 Jan 2023 20:44:45 +0000
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