Tesla (TSLA) announced on Thursday that shareholders voted in favor of giving Chief Executive Elon Musk his 2018 $56 billion pay package and reincorporating the EV giant in Texas, moving it from Delaware. TSLA shares gained ground early Friday.
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The Tesla board won approval for Musk’s pay package Thursday with 77% of the total vote of shares, according to regulatory filings. Around 63% of outstanding shares voted in favor of reincorporating in Texas. In 2018, Musk’s compensation deal received 73% of the vote.
The results were revealed during Tesla’s annual shareholder meeting late Thursday. The vote on Musk’s compensation required a simple majority of votes, excluding those owned by Musk and his brother, Kimbal Musk. Meanwhile, the vote to reincorporate Tesla in Texas necessitated a majority of all shares outstanding, with any uncast votes counted as “no.”
In the run-up to Thursday’s meeting, there was speculation Musk could leave the EV giant or shift efforts to his other companies if he was not awarded his pay package. The compensation deal is currently valued at around $45 billion.
The decision by shareholders to reapprove Musk’s pay deal comes after a Delaware judge ruled against the 2018 package, deciding that the package was excessive and unfair to Tesla investors. The judge criticized Musk’s “extensive ties” with Tesla board members.
Delaware courts could still block the reapproved package.
Tesla Stock: New Products Teased, Robot Ambitions
Meanwhile, Musk at the meeting Thursday touted Tesla’s autonomous robotaxi efforts and its work on the humanoid robot, Optimus, as the main aspects of the EV giant’s “new book.”
“I am confident of the prediction that there will be more — like the ratio of humanoid robots to humans will be greater than 1:1,” Musk said Thursday. “So that there will be more than 10 billion humanoid robots in the world, probably 20 or more, and Tesla is going to be by far the leader in that.”
Musk also teased a photo Thursday signaling Tesla is working on three new products.
“We got some new products we’re working on,” Musk said Thursday. “Just wait.”
Elon Musk Can’t Wait
Late Wednesday, Musk posted to X that both resolutions, his pay package and reincorporation to Texas, were “currently passing by wide margins.”
Musk’s post was accompanied by two graphs, one for each vote, showing that both his compensation deal and the reincorporation questions had passed the “guaranteed win” level. The Tesla head’s social media post came at 10:50 p.m. EST.
“It is a pop the champagne moment for Musk and Tesla shareholders,” Wedbush Securities analyst Dan Ives, a longtime Tesla bull, wrote Thursday. “This removes a $20-$25 overhang on the stock in our opinion that has weighed on shares since the head scratching Delaware ruling set this Twilight Zone soap opera on earlier this year.”
Tesla Stock Performance
TSLA shares advanced 1.4% during premarket action on Friday. On Thursday, Tesla stock gained 2.9% to 182.47, hitting an intraday high of 191.08. Tesla stock jumped 3.9% on Wednesday, retaking its 50-day moving average after slipping below that key level Tuesday for the first time since May 13.
Last week, Tesla stock fell 0.3% to 177.48 and shares are now down 4.5% in June.
TSLA declined 2.8% in May. TSLA shares remain down around 30% in 2024.
However, Tesla has rallied since reporting first-quarter earnings and revenue on April 23, finding support just above its 50-day moving average, according to MarketSurge analysis. On April 22, Tesla stock hit a 52-week low of 138.80.
The Robotaxi And Tesla Stock
Following Thursday’s shareholder meeting, Tesla reports second-quarter earnings in mid-July. The company will unveil its “robotaxi” on August 8.
On Wednesday, Cathie Wood and her Ark Invest firm updated its Tesla stock price target to 2,600 by 2029. Wood has long been bullish on Tesla’s autonomy push and robotaxi aims.
Wood’s firm estimates that around 90% of Tesla’s enterprise value and earnings will be attributed to the robotaxi business in 2029.
Without a robotaxi network and business, Ark Invest says its TSLA price target would be around $350 per share, according to the report.
“We remain confident that the service will launch within the next five years,” Ark Invest said.
JPMorgan analysts on Tuesday said they expect Tesla to show off a robotaxi prototype. However, actual robotaxi revenues could be years away. That followed discussions with Tesla investor relations team.
Tesla stock ranks seventh in the 35-member IBD Auto Manufacturers industry group. The stock has a weak 46 Composite Rating out of a best-possible 99. Shares have a 20 Relative Strength Rating and a 61 EPS Rating.
Please follow Kit Norton on X @KitNorton for more coverage.
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