Most Wall Street analysts remain divided on Tesla’s future after the electric car maker’s shareholders voted to pass CEO Elon Musk’s nearly $1 trillion pay plan. The paid plan, introduced in September, received 75% support among voting shareholders. The results were announced Thursday at the company’s annual shareholder meeting in Austin, Texas. Specifically, the compensation package consists of 12 tranches of stock that will be granted to Musk if Tesla reaches certain milestones over the next 10 years. It would also increase Musk’s ownership and voting rights in the company. Analysts highlighted pros and cons based on this passage. Regarding the former, he pointed out that Musk is likely to remain Tesla’s top executive. But regarding the latter, questions arose as to how Mr. Musk would execute to achieve the lofty goals set. Here’s what they said: UBS: Sell rating, $247 Analyst Joseph Spack’s target suggests a downside of about 44% from Tesla’s Thursday closing price. “This award paves the way for Elon Musk to be rewarded with up to $1 trillion if a series of 12 market cap and 12 operational milestones are achieved. We expect this to pass, and based on our conversations with investors, we expect it to pass broadly. Tesla said preliminary results showed 75% voted in favor of the proposal, which would likely allow Musk to stay at Tesla and focus on his autonomous humanoid AI vision to achieve his goals. The comparable weight, $350 Barclays forecast corresponds to a downside of approximately 22%. “While there were few surprises at today’s Tesla shareholder meeting, the event broadly reminded investors of the excitement facing Tesla’s growth prospects. However, we believe the key issue for the stock remains the execution of Tesla’s growth strategy.” Goldman Sachs: Neutral, $400 Goldman Sachs’ target assumes a 10% downside going forward. “Given the pre-approval of the 2025 CEO Incentive Award, we believe investor focus will shift not only to Tesla’s chances of achieving these goals, but also to key milestones and data points such as: 1) Tesla’s plan to remove safety observers from its Austin robotaxis by the end of the year, 2) the timing of personal FSDs being no longer monitored, 3) Q4 vehicle deliveries (likely to be reported as early as January), and 4) Optimus. Announcement of V3 (the company indicated in its third-quarter earnings call that it could happen late in the first quarter).Bank of America: Neutral, $471 Analyst Federico Melendi’s forecast is 6% above Tesla’s Thursday closing price. “The shareholder vote on Mr. Musk’s compensation package was overwhelmingly positive with 75% support. The potential investment in xAI was approved as well. With the exception of the annual re-election proposal for board members, all other recommendations in the proxy statement were voted in line with Tesla’s board recommendations.” Baird: Outperform, $548 Baird’s price target was about 23% above Tesla’s closing price on Thursday. “TSLA’s CEO Performance Award was approved by shareholders with a 75% vote. We expect this to be a modest positive for the stock, but more importantly, it avoids what would have been a more severe negative impact. Questions still remain, including what will happen with legal disputes related to the previous salary package. That said, we do not view this as an excess for investors and believe that the focus will now shift to new products and the rollout of TSLA’s AI ambitions. ”
