President Donald Trump has started a federal review of two top proxy advisory firms, Institutional Shareholder Services (ISS) and Glass Lewis. This is a big win for Tesla CEO Elon Musk. The executive order, which was made public on December 12, 2025, goes after these companies because they have a lot of power over how shareholders vote, especially when it comes to environmental, social, and governance (ESG) and diversity, equity, and inclusion (DEI) initiatives. Musk and other business leaders have been critical of ISS and Glass Lewis for a long time because their recommendations often go against what companies and investors want.
Proxy advisory firms like ISS and Glass Lewis are very important for helping institutional investors, like pension funds, decide how to vote on corporate issues. Their suggestions can have a big effect on important corporate decisions, such as how much executives get paid. These companies have been against Musk’s plan to give Tesla employees a $1 trillion pay package. ISS and Glass Lewis have both told shareholders to vote against the plan in the past. Even so, Tesla shareholders recently approved Musk’s pay with strong support. This shows that there is still tension between corporate leadership and advisory influence.
The Trump administration’s move is in line with other conservative worries about the growing power of proxy advisers. Critics say that these firms put political agendas ahead of shareholder value. The Securities and Exchange Commission (SEC) is now in charge of looking at the companies’ methods and openness. This could lead to changes in how they run their businesses and give investors advice. Experts in the field say that this increased scrutiny may lead ISS and Glass Lewis to change their recommendations or improve how they disclose information to avoid problems with the law.
