Cathie Wood, the Founder, CEO, and CIO of ARK Invest, voiced strong opposition on Sunday evening to a Delaware court’s decision that mandates Tesla to annul the March 2018 vote concerning Elon Musk’s performance-based compensation package.
Wood described the ruling as “un-American, an assault on investor rights, and an insult to the Board of Directors of one of the most stunningly successful companies in US history.”
She praised Robyn Denholm, Chair of Tesla’s Board, for her integrity and professional conduct. “Robyn is a professional of unquestionable integrity with a no-nonsense, objective, truth-wins-out philosophy,” Wood stated, highlighting Denholm’s long-standing role as an independent director on Tesla’s Compensation Committee.
After consulting with ARK Invest’s General Counsel on the 200+ page court decision, Wood concluded that the legal nuances and controversial interpretations failed to recognize the broader implications of the ruling. “Legal nuances and the controversial interpretation of them have missed the forest for the trees, spectacularly and unfairly,” Wood remarked.
Wood also reflected on the ambitious nature of Musk’s compensation package, which was contingent upon achieving performance goals that many analysts and auto manufacturers deemed unattainable. “Tesla’s Board incentivized @elonmusk with a Herculean task that most analysts and auto manufacturers did not believe possible,” she noted. Wood’s confidence in Tesla’s potential was based on research centered on Wright’s Law, leading her to support the compensation plan, which was approved by approximately 80% of shareholders.
Wood shared her enthusiasm for Tesla’s goals, recalling her reaction to the company’s ambitious targets in 2018. “We were thrilled to learn in February 2018 that Elon Musk and the Board were aiming so high,” she said, referring to Tesla’s aim to reach a bull case price target that would represent a significant increase in value.
The ARK Invest CEO also highlighted the positive impact of Tesla’s success on shareholders, many of whom have shared stories of significant personal financial gains. “Thanks to Elon’s ingenuity and dogged determination, Tesla hit our bull case target price in 2021, two years earlier than we anticipated,” Wood stated, underscoring the transformative effect of Tesla’s achievements on its investors.
In conclusion, Wood criticized the Delaware court’s decision as a detriment to American ideals, stating, “The Delaware court’s decision is an embarrassment to our country’s ideals and a travesty.”
Tesla CEO Elon Musk expressed his gratitude for Wood’s support with a simple “Thank you” in response to her comments.