Tesla Inc. is looking to woo its unusually large base of retail investors to get approval for Chief Executive Officer Elon Musk’s US$56 billion pay package.

To help lead that drive, the company's board has hired a strategic adviser, according to a person familiar with the matter. To bolster the campaign, the adviser is working with an outside law firm, the person said.

The adviser has set up a dedicated Vote Tesla website to encourage participation among retail investors, who hold an estimated 42 per cent of shares in the company. It urges shareholders to cast votes online, by QR code, by phone and by mail. It also features a video with board Chair Robyn Denholm, who says supporting Musk’s pay is critical to Tesla’s growth.

That's all ahead of Tesla’s June 13 annual meeting, when investors in the electric-car maker will vote on whether to uphold a 2018 compensation agreement. A Delaware judge vetoed the package three months ago, writing in her opinion that Tesla directors hadn’t looked out for the best interests of investors.

“We don’t believe one judge’s opinion should void the will of millions of votes cast by all of the owners,” Denholm says in the video on the Vote Tesla website.

While the vote is only advisory, it could have big implications for the future of Musk’s leadership. Securing majority approval would bolster the board’s arguments that the Delaware court was wrong. A loss would be a major embarrassment.

Musk has threatened to develop products outside of Tesla if he doesn’t attain at least a 25 per cent equity stake in the carmaker — a key part of the voided pay package. If the remuneration deal is reinstated, the CEO has enough options to almost double his current holding in Tesla and land at roughly 21 per cent. The path for Musk to attain that larger stake becomes unclear if shareholders don’t vote it through.

On Musk’s social media platform X, Tesla fans have been voicing their support for the CEO. In hundreds of posts tagged #VotedTesla24, many users who say they’re investors claim to have already cast their ballots. Musk himself has urged shareholders to participate, reposting messages from people like self-described “Fangirl of Elon,” Alexandra Merz.

Merz, a Santa Barbara, California, resident known as “Tesla Boomer Mama” on X, has created tools to help Tesla shareholders write to large index funds and ask to vote shares that may be held in retirement accounts or other accounts they don’t manage directly. 

“I want to make sure that retail investors vote,” Merz said by phone. “But I also want people to reach out to their fund managers.” (Some brokers outside of the U.S. don’t allow retail shareholders to vote.)

Even with Musk fans rallying for support, the board still has work to do to win the vote. Typically, few retail investors actually vote at annual meetings.

At least one large retail investor, Leo KoGuan, has said he won’t support the pay deal. He’s also publicly railed against the way Musk has been managing Tesla, which seems to have also unsettled the market at large.

Tesla’s financial performance has been flagging amid a global slowdown in electric vehicle sales. Days before the company asked shareholders in a filing to support Musk’s $56 billion pay deal, Tesla said it was cutting global headcount by more than 10 per cent.

Meanwhile, a series of top executives have left Tesla as it’s shifted focus to building autonomous robotaxis over more affordable EVs. The stock has fallen 29 per cent so far this year, compared to a 10 per cent gain in the S&P 500.

Singapore-based KoGuan, a billionaire businessman, has long been a big admirer of Musk. But he’s grown increasingly wary of the entrepreneur’s many commitments — SpaceX, Neuralink, X and more — and said his job at Tesla shouldn’t merely be a way to bankroll other business ventures.

“The court had spoken and many facts came out,” KoGuan, who owns about 0.8% of Tesla, said in an email. “He has to respect and obey the court’s decision.”

KoGuan said he’ll also vote no on a separate proposal to move Tesla’s corporate domicile to Texas from Delaware, where the judge struck down Musk’s pay deal. Tesla already moved its corporate headquarters to the Lone Star state from California in December 2021. This week, the company said it’s running sponsored ads to vote for both proposals.

The board’s strategic adviser that set up the Vote Tesla website is also helping the company liaise with large asset managers, people familiar with the matter said. Those investors hold roughly 46 per cent of the company’s shares, down from about 70 per cent when the first vote was held back in 2018, according to data compiled by Bloomberg.

Observers will closely watch the impending recommendations by proxy advisory firms Institutional Shareholder Services Inc. and Glass Lewis & Co., which are widely believed to have some impact on how votes are cast, particularly for shares held in passive funds.

After Musk himself, Tesla’s largest investors are Vanguard and BlackRock, which hold shares in myriad active and passive funds. Representatives for both asset managers declined to comment, citing company policy on publicizing votes before annual meetings.

The Tesla board won the 2018 pay vote with 73 per cent of votes cast supported the deal, but the situation may be tougher now.

Shareholders who held stock six years ago have seen the value of their equity soar as Musk met one pay condition after another. He ultimately earned the last of his options in the second quarter of 2021 after the value of Tesla soared above $650 billion. It later peaked at about $1.2 trillion.

Now, Tesla’s market capitalization sits at less than $600 billion. Musk has attracted new critics as the owner of X, where he frequently posts controversial political opinions and attacks the media.

Still, there’s no clear executive to take the place of Musk, who’s widely seen as the driver behind its transformation from a scrappy Silicon Valley startup to the world’s most valuable automaker. On social media, shareholders have been praising his contributions to the company as they urge others to vote for the pay deal.

“It's not much, but I did what I could!” one X user wrote on May 11, posting a screenshot of their vote confirmation. “The people are with you, @elonmusk!”