A group of labor unions and progressive advocacy organizations is urging state financial officers to speak out against a new compensation plan for Elon Musk, the CEO of EV maker Tesla (TSLA). These groups, including the American Federation of Teachers and MoveOn, sent a letter to state officials who oversee public pension funds to warn that Musk’s massive pay plan could harm workers’ retirement savings by diluting shares. Therefore, they want officials to push asset managers to vote against the proposal and to demand a more independent board at Tesla.
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This move comes as Musk’s compensation continues to create controversy. In January 2023, a Delaware judge struck down Musk’s original 2018 pay package, valued at $56 billion, after calling it “unfathomable” and tainted by board conflicts. Despite that ruling, Tesla recently gave Musk 96 million new shares, worth about $29 billion, as a temporary measure while the case is being appealed. It is worth noting that Tesla shareholders had voted in favor of the original package in June 2023 and approved moving the company’s legal base to Texas, although legal appeals could still take months to resolve.
Nevertheless, the Tesla board insists that Musk’s leadership is essential, especially as the company shifts from making EVs to focusing more on AI and robotics. However, the unions and advocacy groups disagree. As a result, they are encouraging officials to reject any new compensation plan and to vote against directors who aren’t independent from Musk’s influence. Although Tesla hasn’t yet shared its official proxy statement for the upcoming shareholder meeting, these groups expect the controversial pay issue to appear on the ballot.
What Is the Prediction for Tesla Stock?
Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on 14 Buys, 15 Holds, and eight Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average TSLA price target of $307.23 per share implies 4% downside risk.
