As shareholders prepare to vote for a second time on Elon Musk‘s $56 billion pay package, there is growing curiosity about whether this package will be approved and what the consequences will be for Musk if it is not. On June 13, Tesla’s (NASDAQ:TSLA) shareholders will decide the fate of Musk’s $56 billion compensation package for the second time. This vote comes after a Delaware judge voided the first vote earlier this year, stating that the shareholder approval process was “deeply flawed.”
As the voting day approaches, Musk is going all out to woo shareholders on the social media platform X, offering Tesla factory tours and defending against critics of his proposed pay package, which would make him the highest-paid CEO globally.
Proxy Advisory Firms Recommend Voting Against the Package
Meanwhile, according to a Verge report, several top proxy advisory firms have recommended voting against the proposal, calling it excessive and harmful to individual shareholders’ value. On Saturday, Norway’s $1.7 trillion sovereign wealth fund stated that it would vote against Musk’s $56 billion package. According to Reuters, citing LSEG data, the Norwegian fund is the EV major’s eighth-biggest shareholder.
Amid this uncertainty, Musk is seeking 25% ownership of Tesla to steer the company into AI and robotics. Currently, Musk holds a 13% stake in Tesla.
Will Musk Leave TSLA If Pay Package Is Not Approved?
There is also a buzz that Musk may leave the company if the $56 billion pay package is not approved. In a shareholder letter, Tesla board chair Robyn Denholm called upon the shareholders to approve the pay package or risk having Musk leave the company.
Denholm stated, “Elon is not a typical executive, and Tesla is not a typical company. Motivating someone like Elon requires something different.” She added that Musk does not have unlimited time and has many opportunities elsewhere.
Is Tesla Stock a Buy or Sell Today?
Analysts remain sidelined about TSLA stock, with a Hold consensus rating based on 14 Holds and nine Buys and Sell each. Year-to-date, TSLA has declined by more than 20%, and the average TSLA price target of $174.60 implies a downside potential of 1.6% from current levels.
