Tesla: Musk's compensation plan reportedly approved

(CercleFinance.com) - Tesla shares climbed more than 6% on the New York Stock Exchange on Thursday, as CEO Elon Musk claimed on X that the group's shareholders had finally approved his controversial compensation plan "by a large majority".


The businessman indicated that the electric vehicle manufacturer's annual general meeting, which is being held today, is also moving towards approval of the plan to relocate the company's headquarters to the state of Texas, again by a large majority.

In a reaction note, analysts at Wedbush Securities reckon that Elon Musk can 'pop the champagne' after the vote on these two controversial resolutions.

'This removes the sword of Damocles that was hovering over the stock and which could have penalized the share value by as much as $20 to $25', stresses the brokerage firm.

Investors feared that without the compensation package, Elon Musk would become less involved in the company's artificial intelligence and automation projects.

"Yet without the prospects of AI and autonomous driving, Tesla's long-term earnings trajectory would be seriously compromised", say analysts at Canaccord Genuity.

Some professionals even feared an outright departure of Musk from Tesla's management in the event that his compensation package was rejected by shareholders.

Under this incentive scheme, which dates back to fiscal 2018, the billionaire could obtain up to $56 billion through the granting of 'stock options'.

Although the performance criteria had been met, this amount had aroused the ire of some shareholders, and the compensation plan was eventually annulled by a Delaware court last January.

'We can now expect Musk to renew today in Austin (...) his commitment to remain Tesla's CEO for the next three to five years", says a satisfied Wedbush.

The broker also expects the executive to detail plans for a sub-$30,000 model, his initiatives in autonomous driving and to say more about the revelation, scheduled for August 8, of the famous "robotaxi".

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