The week in GRC: Elon Musk calls ISS and Glass Lewis ‘corporate terrorists’ over $1 trn pay package dispute as ICGN criticizes SEC policy changes

– Elon Musk has labeled shareholder advisory firms ISS and Glass Lewis as ‘corporate terrorists.’ The remarks came after both firms advised Tesla investors to vote against his proposed $55 bn pay package ($1 trn at its peak), a revived version of the 2018 deal that had been struck down earlier by a Delaware court for being ‘deeply flawed.’

As reported by Reuters (paywall), ISS and Glass Lewis argued that Musk’s compensation was excessive, diluted shareholder value and failed to align with long-term investor interests. Musk, however, sees their opposition as an attack not just on him, but on Tesla’s independence and innovation.

Writing on X (formerly Twitter) Musk accused the firms of voting along ‘random political lines’ and wielding unaccountable power over corporate governance. ‘They’re like corporate terrorists, deciding the fate of companies they don’t even build,’ he wrote.

According to CNN, Musk said on an analyst call that ‘it’s not like I’m going to go spend the money. There needs to be enough voting control to give (me) a strong influence – but not so much that I can’t be fired if I go insane.’

– The International Corporate Governance Network (ICGN) has issued a letter to SEC chairman Paul Atkins and his fellow commissioners criticizing several major SEC policy changes that present a ‘risk to the attractiveness of US capital markets.’

In the letter the ICGN criticizes the SEC’s lack of public consultation on recent policy shifts, arguing that changes affecting shareholder rights should undergo open public comment to maintain governance standards. They also say that it supports empowering retail shareholders but warns that ‘auto-voting’ or standing voting instructions – especially those automatically voting with management – pose serious governance risks.

In particular, the group opposes the SEC’s new stance allowing companies to include mandatory arbitration clauses without affecting registration approvals saying that it erodes shareholder protection, reduces transparency and hurts minority investors.

Instead, it says the SEC should retain active oversight of arbitration clauses during registration reviews to ensure investor protection and maintain fair, orderly and efficient markets.

– Earlier this week, CoreWeave said it disagreed with recommendations from ISS and Glass Lewis advising shareholders to reject its proposed all-stock acquisition of Core Scientific.

CoreWeave said it believes the agreed transaction ‘represents fair value’ for both companies. While ISS and Glass Lewis acknowledged the strategic rationale for the merger, they argued that Core Scientific’s share price and standalone risks weigh against the transaction.

CoreWeave pointed out that no alternative bidder had emerged and emphasized that Core Scientific’s value is deeply integrated with CoreWeave’s operations. The company urged Core Scientific shareholders to vote for the merger on the proxy by October 30, adding that the boards of both firms unanimously approved the agreement expected to close in Q4 of 2025.

– Novo Nordisk’s chair Helge Lund and six independent directors will step down following a disagreement with the company’s controlling shareholder, the Novo Nordisk Foundation, over the board’s future composition. According to the Financial Times (paywall), Lund said the decision to call an extraordinary general meeting came after the parties failed to reach ‘a common understanding’ as the foundation sought a broader reshuffle than the board proposed.

The foundation plans to nominate five new directors, including former CEO Lars Rebien Sørensen as chair, and will name two more next year. Sørensen, who also leads the foundation, said he will serve two to three years to support new CEO Mike Doustdar and the company’s transformation plan, which includes 9,000 job cuts.

Shares in Novo Nordisk fell 1.6 percent on the announcement, extending a sharp decline of more than 55 percent over the past year as the Danish drugmaker struggles with slowing profit growth, lost ground to Eli Lilly, and investor disappointment in its next-generation weight-loss drug.

– Activist investor Jana Partners has taken a 9 percent stake in Six Flags Entertainment and joined forces with NFL star Travis Kelce to push for stronger marketing and better customer experiences.

As reported to Reuters, Jana’s managing partner Scott Ostfeld announced the move at the 13D Monitor Active-Passive Investment Summit in New York, earlier this week, saying Kelce and two veteran executives will help pressure Six Flags to improve performance.

Shares of Six Flags jumped 17 percent to $25.63 following the news, though the stock remains down 58 percent since its July 2024 merger with Cedar Fair. The company, valued at about $2.6 bn, has struggled with weak attendance due to poor summer weather and post-merger challenges.

Kelce could serve as a potential board nominee alongside consumer executive Glenn Murphy and technology executive Dave Habiger. Six Flags also recently added an executive from Sachem Head Capital to its board.

– US consumers who won a $425 mn jury verdict against Alphabet’s Google in a privacy class action have asked a federal judge to force the company to forfeit an additional $2.36 bn in profits. The consumers called the amount a ‘conservative approximation’ of Google’s ill-gotten gains after the jury found Google secretly collected app activity data from millions of users who had disabled account tracking.

The plaintiffs argued that the $425 mn award is ‘clearly insufficient’ to remedy ongoing harm caused by Google’s conduct, which the jury deemed ‘highly offensive’ and ‘without consent’.

According to Reuters, Google has denied wrongdoing and said it will appeal, asserting that the data collected was anonymized and that users maintain control through privacy tools.

The 2020 lawsuit alleged Google violated privacy assurances by collecting user data over eight years despite users disabling the ‘web and app activity’ setting. Google has also asked the court to decertify the class of 98 million users.