Benzinga - by Chris Katje, Benzinga Staff Writer.
The highly anticipated 2024 Tesla Inc (NASDAQ:TSLA) shareholders meeting will be held Thursday, June 13 and includes an important vote on a new compensation plan for CEO Elon Musk.
Here's a look at how to watch, details of the vote and what analysts are saying ahead of the key shareholder decision.
How to Watch: The 2024 Tesla Shareholders Meeting will be a limited in-person event for shareholders on Thursday at the Tesla gigafactory in Texas. A random drawing was done to decide which shareholders could attend.
Tesla will livestream the event on YouTube beginning at 4:30 p.m. ET, June 13.
Related Link: Cathie Wood, Ark Invest Set New $2,600 Price Target For Tesla: ‘Every Car Becomes An AI-Powered Cash Flow Generation Machine’
The Key Proposals: There are multiple proposals shareholders were asked to vote on ahead of the meeting including changing its corporate home to Texas and confirming the 2018 CEO pay package for Elon Musk that was voided by a judge earlier this year.
"The 2018 CEO pay package required Elon to deliver transformative and unprecedented growth to earn any compensation. It was a big risk, and many thought that the plan's targets for benefits to stockholders were simply unachievable," Tesla said.
The company highlighted the impressive progress and gains made over the last five-plus years.
"Elon delivered: Tesla's stockholders have benefitted from unprecedented growth under Elon's leadership and Tesla has met every single of the 2018 CEO pay package's targets."
The new plan for shareholders to vote on included requirements that Musk hold the shares he receives from exercising options for five years.
"He will continue to be driven to innovate and drive growth at Tesla because the value of his shares will depend on it!"
The board of directors recommended a vote for the plan and said that shareholders overwhelmingly approved the same plan back in 2018.
Musk owns 13% of Tesla and is seeking to get to a 25% stake with threats he could take his AI initiatives to other companies outside of Tesla.
What Analysts Are Saying: Retail investors have voted in favor of the compensation plan while institutional investors remain divided, Cantor Fitzgerald analyst Andres Sheppard said.
The analyst, who has an Outperform rating and $230 price target, said the pay package in 2018 included "ambitious performance targets," which Musk helped meet.
"While Tesla's shares have come down ~32% YTD, the company achieved its highest market cap of ~$1.25 trillion in November 2021, surpassing its $650 billion target," Sheppard said.
The analyst highlighted strong support from supporters such as Ron Baron and Baillie Gifford who have voted in favor and publicly shown support that Musk's leadership led to the success and is necessary in the future.
"We believe Musk's package is most likely to get approved. If the vote fails to pass, the possibility arises that Musk could potentially leave the company, and have a negative impact on Tesla's roadmap."
Musk leaving could impact the robotaxis, next-gen vehicles, lower-cost vehicles and AI integration into products, the analyst said.
"Musk could potentially shift his focus to his other businesses such as X or SpaceX should the vote fail to approve the package."
While passing the pay compensation package could be important for the long-term, Sheppard notes that the stock could see a brief sell-off as there are concerns about dilution of shares and fiscal prudence.
Outside of the shareholders meeting, Sheppard points to August 8 as being "an important catalyst" for Tesla with the company sharing more details on its robotaxis.
"Although we don't expect this segment to launch prior to 2027, we do expect it to be a meaningful business segment for the company over the long term."
Wedbush analyst Dan Ives recently emphasized the strong connection between Tesla and Musk.
"Tesla is Musk and Musk is Tesla," Ives tweeted.
Ives highlighted a comment made by former Ford CEO Mark Fields where Fields said, "If Musk leaves, you're going to have a drain of talent there at Tesla."
Bernstein analyst Toni Sacconaghi said Tesla shares could drop 5% if the pay package is voted down Thursday.
Ark Invest CEO and key Tesla investor Cathie Wood recently praised Musk's leadership at Tesla as he helped the company make the bestselling car in the world.
"I'd argue that no other executive is as aligned with shareholders as Elon Musk, who committed to no salary, no bonus, no stock comp FOR 10 YEARS, unless he created tremendous value for Tesla shareholders," Wood tweeted.
TSLA Price Action: Tesla shares closed Wednesday up 3.88% at $177.29 versus a 52-week trading range of $138.80 to $299.29.
While Tesla shares are down 28.5% over the last year and down 28.1% year-to-date in 2024, the stock has greatly outperformed the SPDR S&P 500 ETF Trust (NYSE:SPY) over the past five years.
Tesla shares are up 1,137% over the past five years, while the S&P 500 ETF is up 85.9% over the same time period.
Read Next: EXCLUSIVE: Benzinga Readers Who Own Tesla Shares Overwhelmingly Voted This Way On Elon Musk’s Compensation Package
Photos: Shutterstock
Latest Ratings for TSLA
| Feb 2022 | Daiwa Capital | Upgrades | Neutral | Outperform |
| Feb 2022 | Piper Sandler | Maintains | Overweight | |
| Jan 2022 | Credit Suisse | Upgrades | Neutral | Outperform |
View the Latest Analyst Ratings
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.