Tesla (TSLA) investors will vote this week on whether to approve a pay deal worth up to $878 billion for Chief Executive Elon Musk. The vote will decide if Musk keeps his tight link to Tesla or if he steps back from the company. The board has warned that Musk might leave if shareholders reject the deal, and that such a move could hurt Tesla’s stock price.
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The plan would give Musk large blocks of Tesla stock over ten years if the company hits major performance targets. To unlock the full package, Tesla’s market value would need to reach $8.5 trillion. Even if only some goals are met, Musk would still earn tens of billions in stock.
Meanwhile, TSLA shares fell 5.15% on Tuesday, closing at $444.26.
Supporters and Critics Divide
Some investors back the plan because they believe Musk can deliver new growth through Tesla’s work on robotaxis and humanoid robots. They say that if the stock rises, all shareholders benefit, no matter how much Musk earns.
However, others see the plan as too risky and too large. Critics argue that it ties Tesla’s future too closely to one leader and gives Musk more control than any board should allow. Several big investors, including the California Public Employees’ Retirement System and Norway’s sovereign wealth fund, have said they will vote against the proposal. They warn that Musk’s influence creates what is known as “key person risk,” since Tesla relies so heavily on his role.
A Question of Control
Musk holds about 15% of Tesla shares and could use those votes to help pass the plan. The company’s board says keeping Musk is vital for Tesla’s future value, but governance experts disagree. They note that Musk already owns enough stock to benefit greatly if Tesla’s price rises, even without more compensation.
The vote follows a past pay dispute. A Delaware judge threw out Musk’s 2018 compensation plan, calling it excessive and poorly managed by the board. Tesla has since moved its legal base to Texas, where it is harder for small shareholders to sue.
The outcome will show whether investors see Tesla’s success as tied to Musk or ready to stand on its own. A vote for the deal could secure his leadership for years. A vote against it could test how much of Tesla’s worth depends on its CEO’s presence. Either way, Thursday’s decision will shape how Tesla balances growth, governance, and investor trust in the years ahead.
Is Tesla Stock a Buy, Hold, or Sell?
Tesla continues to divide opinions among the Street’s analysts with a Hold consensus rating. The average TSLA stock price target stands at $395.54, implying a10.97% downside from the current price.
