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Social media campaign helps garner rare small-investor

support

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Win for Musk despite opposition from major institutions

By Abhirup Roy

SAN FRANCISCO, June 13 (Reuters) - Elon Musk's army of

small-investor allies took a victory lap on Thursday as the

Tesla CEO won a critical shareholder vote for his $56

billion pay package despite opposition from major institutions.

Mom-and-pop investors, who hold an unusually high share of

the electric-vehicle maker, are typically apathetic toward

voting.

But in an unusual show of support, many had been campaigning on

social media for weeks for the celebrity billionaire CEO's pay

to be reinstated after a Delaware judge voided it in January

because she found that Musk had improperly controlled the

process.

"We have the most awesome shareholder base," Musk said at

the shareholder meeting after the vote was announced. "Hot damn,

I love you guys," he said to a roaring and applauding crowd of

investors at the Tesla factory in Austin, Texas.

Backing from retail shareholders along with support from

some big institutional investors was key to turning the vote in

Musk's favor, a source familiar with the preliminary tally told

Reuters on Wednesday, after the CEO tipped off on social media

platform X that the proposal was garnering huge support.

"Tesla's retail shareholders aren't just passively adding

shares to their portfolio. They're participating in running and

advancing the company," said Omar Qazi in a post on X from the

handle @WholeMarsBlog. "They vote. They tell their friends. It's

not just about investing. It's a movement," said Qazi who has

more than 476,000 followers.

Institutional investors have been divided on the issue.

While some supported Musk's pay, others such as California

Public Employees' Retirement System and proxy firms Glass Lewis

and Institutional Shareholder Services urged shareholders to

reject the pay package, calling the compensation excessive.

"When both the institutions and the proxy advisory firms are

leaning in one direction, it's very rare for the vote to come

out the other way," John Lawrence, a partner at law firm Baker

Botts, told Reuters. "It shows in this case the company's

understanding of the power of social media."

'WE HAVE YOUR BACK'

Musk enjoys a global fan base for transforming Tesla from a

startup to a behemoth and for innovation at his other companies

including rocket maker SpaceX. But standing up to powerhouse

investors who voted "no" on the pay package required more than

just a fan base.

Social media has been abuzz for weeks with many users, such

as Alexandra Merz, who posts on X as @TeslaBoomerMama, calling

on people to vote. The efforts prompted some non-U.S. banks and

brokerages to allow Tesla investors to vote, which was not

previously the case.

"Don't mess with Tesla Retail Shareholders," Merz, who

attended the meeting and received a standing ovation from

investors for her endeavors, posted on X. "Your votes will help

to remedy a true injustice."

Musk himself has also been actively wooing their support

with regular social media posts. He had set up a separate

website to educate investors on the proposals, which also

included reincorporating the company in Texas, and on how to

vote.

The company's board sent regular letters to shareholders

highlighting Musk's importance to Tesla and alluding to the

risks of losing his involvement if the pay package was rejected.

Musk even offered tours of Tesla's factory to some investors who

voted.

The plan worked. About 90% of the retail investors who voted

were in favor, Musk said in a post on X over the weekend.

The approval is critical as Musk faces an uphill legal fight to

convince the Delaware judge who said the Tesla board was

"beholden" to him, while Tesla might also field fresh lawsuits

over the latest vote. Still, small investors assured their

continued support.

"Shareholders have spoken, again, and hopefully now our

votes can officially count," X user Alicia said in a post.

"@elonmusk, we've always believed in you and will continue to do

so. We have your back!"