Most Wall Street analysts remained divided on Tesla ‘s future after the electric vehicle maker’s shareholders voted to pass CEO Elon Musk’s nearly $1 trillion pay plan. The pay plan, introduced in September, garnered 75% support among voting shares. Results were announced at the company’s annual shareholders meeting on Thursday in Austin, Texas. Specifically, the pay package consists of 12 tranches of shares that Musk would be granted if Tesla hits certain milestones over the next decade. It would also increase Musk’s ownership and voting power in the company. Analysts highlighted pros and cons from the passage. On the former, they noted that it likely ensures Musk stays as Tesla’s chief exec. On the latter, however, they raised questions over how Musk will execute to reach the lofty goals set. Here’s what they said. UBS: sell rating, $247 Analyst Joseph Spak’s target implies about 44% downside from Tesla’s Thursday close. “This award clears the way for ~$1T in awards to Elon Musk if a series of 12 market capitalization and 12 operational milestones are met. We expected this to pass and based on conversations with investors believe it was widely expected to pass. Tesla announced that preliminary results show 75% voted for the proposal. This likely ensures Musk stays at Tesla, removing a potential overhang, and allows him to focus on his AI vision autonomous, humanoids towards achieving the goals.” Barclays: equal weight, $350 Barclays’ forecast corresponds to downside of around 22%. “While there were few surprises at today’s Tesla AGM, the event broadly reminded us of the excitement investors face ahead on Tesla’s growth prospects. Yet we believe the key question for the stock now remains on the execution path for Tesla’s growth initiatives.” Goldman Sachs: neutral, $400 Goldman Sachs’ target calls for 10% downside going forward. “Given that the 2025 CEO incentive award was preliminarily approved, we believe investor focus will now shift to the potential for Tesla to achieve these objectives, as well as on key milestones and datapoints including: 1) Tesla’s plan to remove safety observers from its robotaxis in Austin before year-end; 2) The timing for personal FSD to become unsupervised; 3) 4Q automotive deliveries (likely reported in early January); and 4) the unveil of Optimus V3 (which the company suggested on its 3Q earnings call could occur in late 1Q).” Bank of America: neutral, $471 Analyst Federico Merendi’s forecast is 6% above Tesla’s Thursday closing price. “The shareholder vote for Musk’s compensation package was overwhelmingly positive with a 75% approval rate. Potential investment in xAI was approved as well. All the other proposals in the proxy were voted on in-line with the suggestions from Tesla’s Board of Directors, excluding the proposal for the annual re-election of board members.” Baird: outperform, $548 Baird’s price target was approximately 23% higher than Tesla’s closing price on Thursday. “TSLA’s CEO performance award was approved by shareholders with 75% voting in favor. We expect this to be a modest positive for the stock, but more importantly, avoids what we believe would’ve been a more drastic negative impact. There are still questions that remain such as what will come of the legal dispute pertaining to the previous pay package. That said, we do not view this as an overhang for investors and believe the focus will now pivot to rolling out new products and TSLA’s AI ambitions.”
Tesla shareholders passed Elon Musk’s $1 trillion package. What analysts are saying
