Tesla (NASDAQ:TSLA) shareholders have re-approved Elon Musk’s multibillion-dollar compensation plan, valued at approximately $56 billion. This move demonstrates the shareholders’ continued support for the company’s CEO. The decision, announced at Tesla’s annual shareholder meeting, provides the board with leverage to uphold Musk’s compensation plan.
Don't Miss our Black Friday Offers:
- Unlock your investing potential with TipRanks Premium - Now At 40% OFF!
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
As shareholders re-approved the CEO’s record-breaking pay package, Musk emphasized Tesla’s ambitious growth prospects. Musk’s strategic vision, particularly in the areas of self-driving technology and robotics, continues to drive investor confidence.
The re-approval came after a rigorous campaign by Musk and Tesla’s board. Tesla’s board has consistently justified Musk’s substantial pay package, arguing it is essential for keeping him motivated to lead the company. Additionally, shareholders voted to move Tesla’s legal home from Delaware to Texas, aligning it with the company’s headquarters and a major factory.
The Road Ahead
A Delaware judge voided Musk’s compensation package earlier this year, pointing to his close ties with the company’s directors who sanctioned the pay and calling the approval process “deeply flawed.”
Despite this setback, the recent shareholder re-approval equips Tesla with grounds to contest the decision. The company could persuade the Delaware court to reconsider or reverse the verdict and can appeal if necessary. Tesla could argue that the shareholders were fully informed of the court’s concerns and still endorsed the pay package.
The shareholder vote underscores strong investor confidence in Musk’s leadership and vision for TSLA’s future trajectory.
Is Tesla a Buy or Sell?
Tesla stock barely moved in after-hours trading despite the shareholders’ vote favoring Elon Musk. TSLA stock has lost about 26.6% of its value year-to-date, reflecting weak electric vehicle (EV) demand and competitive headwinds.
Given the ongoing weakness in demand, Wall Street is sidelined on TSLA stock. It has a Hold consensus rating based on nine Buy, 14 Hold, and nine Sell recommendations. The price target for TSLA stock is $172.92, implying 5.23% downside potential from current levels.
