The California Public Employees’ Retirement System (CalPERS), one of the largest pension funds in the United States, said that it will vote against Elon Musk’s $1 trillion Tesla (TSLA) pay package. The decision will be made at the EV maker’s annual shareholder meeting on November 6 at Giga Texas. Importantly, Tesla executives have made it clear that the outcome of this vote will significantly influence the company’s future direction.
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Nevertheless, in its statement to Bloomberg News, CalPERS criticized the scale of Musk’s proposed package by noting that it is far larger than what CEOs at similar companies receive. The fund, which owns about 5 million Tesla shares, also argued that the plan would give Musk too much concentrated power. It is worth noting that this is not the first time CalPERS has opposed Musk’s pay. In fact, it also rejected his $56 billion package and was critical of his 2018 performance plan, which a Delaware court later struck down. Tesla is still appealing that ruling.
However, under the 2025 plan, Musk would only be paid if Tesla reaches highly ambitious goals. For example, the company’s market value would need to rise from today’s $1.1 trillion to $8.5 trillion, thereby making it the world’s most valuable company by a wide margin. In addition, Musk has said that the package is less about money and more about protecting his influence at Tesla. More specifically, he warned on X that activist shareholder groups that do not own Tesla stock could one day push him out, which he said makes him uncomfortable.
What Is the Prediction for Tesla Stock?
Turning to Wall Street, analysts have a Hold consensus rating on Tesla stock based on 14 Buys, 11 Holds, and 10 Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average Tesla price target of $382.54 per share implies 13.2% downside risk.
