The controversial $1 trillion pay package of Tesla (TSLA) CEO Elon Musk has been approved by the company’s shareholders.
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Among Tesla shareholders, 75% voted in favor of awarding Musk the biggest pay package in corporate history. Musk had threatened to leave the electric vehicle maker if stockholders did not support the $1 trillion pay package put forward by the company’s board of directors.
Analysts, institutional investors, and corporate governance experts called the pay “exorbitant” and “outrageous,” and many of Tesla’s largest stockholders called publicly for the package to be voted down at the company’s annual meeting.
Highly Controversial
Among the dissenters was the New York City employee pension fund, which wrote in a filing with the U.S. Securities and Exchange Commission (SEC) that, “The Board’s relentless pursuit of retaining its CEO seems to have harmed the Company’s reputation, led to extraordinarily high levels of executive compensation, and delayed progress on meeting key goals like full self-driving.”
However, Tesla’s board of directors said repeatedly that Musk’s $1 trillion pay package is needed to keep him focused on the electric vehicle maker and its new products that include everything from supercomputers to humanoid robots. In the end, the retail investors that make-up the majority of Tesla’s shareholders won out and voted in favor of the hefty compensation for Musk.
However, the $1 trillion pay would only be given to Musk provided certain milestones at Tesla are met in coming years. And a previous pay package of $56 billion that was given to Musk in 2018 is tied up in the courts after shareholders filed lawsuits to block it, claiming it is not in their best interest.
Is TSLA Stock a Buy?
The stock of Tesla has a consensus Hold rating among 34 Wall Street analysts. That rating is based on 14 Buy, 10 Hold, and 10 Sell recommendations issued in the last three months. The average TSLA price target of $395.54 implies 11.30% downside from current levels.
