Tesla shareholders decisively backed Elon Musk’s multibillion-dollar pay package at the annual shareholder meeting on Thursday, with about 72 percent of voting shares supporting the proposal. The compensation plan requires Musk to hold onto the shares for at least five years before selling them, with the shares currently valued at around $48 billion.
Despite concerns about Musk’s engagement in running the company after a judge voided his pay package, Musk reassured shareholders of his commitment to Tesla. Following the vote, Tesla’s stock rose nearly 3 percent on Thursday and continued to climb on Friday, up about 1 percent in premarket trading.
Analysts viewed the vote as a “clear pass” and a “vote of confidence in Elon,” with Bernstein noting that it mitigated concerns about Musk potentially leaving the company. The approval of the pay package was seen as a strategic move to convince the Delaware court to reverse its ruling on the award, which was deemed excessive.
With the pay package, Musk’s stake in Tesla would increase to 20.5 percent, up from about 13 percent, as he aims for a 25 percent stake to maintain influence within the company. Despite Tesla’s stock being down more than 20 percent this year, Musk remains optimistic about the company’s future, particularly in self-driving technology and the development of a humanoid robot called Optimus.
Market analysts have mixed opinions on Tesla’s stock, with some predicting a decline while others foresee a significant rise. Bernstein’s price target implies a 30 percent decline, while Wedbush analysts believe the stock could increase by 50 percent, calling the vote on Musk’s pay package a “pop the champagne moment.”
Overall, the approval of Elon Musk’s pay package by Tesla shareholders signals confidence in his leadership and the company’s future prospects.
