Tesla trades higher ahead of Musk pay vote
Tesla (NASDAQ:TSLA) shares moved positively on Thursday, ahead of this afternoon’s AGM – where shareholders will complete the voting over Elon Musk’s controversial $56 billion pay deal.
Musk’s remuneration, largely comprising stock options, was previously in place until a Delaware judge effectively voided the package in January, triggering the need for fresh shareholder approval.
Today’s shareholders’ votes also include a resolution to move the company's incorporation to Texas.
Musk’s pay package, originally approved in 2018, has faced significant criticism and in recent days a number of significant shareholders have publicly stated that they would vote against it.
However, a very substantial portion of Tesla stock is held by so-called retail investors, many of which are seen to be supportive of Musk.
Musk, meanwhile, in an X post in the early hours of Thursday morning claimed that both key votes “are currently passing by wide margins!”.
According to his critics, Musk is distracted by his ventures like X (formerly Twitter), brain-computer interface firm Neuralink, SpaceX and his artificial intelligence venture X.ai.
Tesla’s AGM kicks off at 4:30 pm Eastern time – which is 9:30 pm in London, and 1:30 pm in California.
Pop the champagne says stockbroker
Daniel Ives, analyst at West Coast stockbroker Wedbush, expects the pair of votes to pass and, in a note, described today’s meeting as a “pop the champagne moment”.
“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,”
“We believe an overwhelming retail presence voting green light for both proposals was key to approval despite some large shareholders voting no.”
The analyst added: " At today's meeting we would expect Musk to also address keeping AI initiatives under the hood of Tesla despite some threats to the contrary.”
Wedbush has an ‘outperform’ rating for Tesla, with a $275 price target.
In New York, Tesla shares were up $6.73 or 3.8% changing hands at around $184.
