EV maker Tesla (TSLA) is preparing for the possibility that CEO Elon Musk could step down if shareholders vote against his proposed $1 trillion pay package. Nevertheless, board chair Robyn Denholm said that if Musk steps back or leaves because the package is rejected, the company would most likely promote a new CEO from inside to ensure a smooth handoff, though outside candidates aren’t ruled out. The proposal would give Musk a 25% stake in Tesla if he achieves major performance goals across Tesla’s car, robotaxi, and robotics divisions.
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Importantly, Musk has made it clear that without this deal, he might shift his focus away from Tesla and to his other businesses, such as SpaceX (PC:SPXEX) and xAI (PC:XAIIQ). As a result, Tesla has been working hard to win support in the days leading up to the Nov. 6 vote. Denholm and other board members have been speaking with large investors while also reaching out to retail investors, who make up about 30% of Tesla’s base. At the same time, proxy advisers ISS and Glass Lewis have recommended voting against the package, which adds pressure since many investors follow their guidance.
The board views Musk as critical to Tesla’s future and says that the package is less about money and more about keeping him fully engaged. Still, Denholm stated that Tesla has a backup plan if needed and pointed to leaders like global production chief Tom Zhu, who has held multiple roles at the company and could step up if required. Another issue on the ballot is whether Tesla should invest in Musk’s AI startup xAI. Denholm explained that Tesla hasn’t invested yet because xAI is working on different technology, but if shareholders approve, a formal review process would begin.
What Is the Prediction for Tesla Stock?
Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on 14 Buys, 11 Holds, and nine Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average TSLA price target of $383.66 per share implies 16.4% downside risk.
