What's Next After Tesla CEO Elon Musk's Pay Package Vote?
Tesla shareholders voted to reinstate CEO Elon Musk's massive pay package. Here's what you need to know.


Tesla (TSLA) stock popped this week as investors awaited then digested the results of a shareholder vote that ultimately reinstated CEO Elon Musk's estimated $56 billion pay package. The vote also gave shareholder approval to the electric vehicle maker moving its state of incorporation to Texas from Delaware.
Musk's compensation package was approved in 2018 and was tied to specific performance milestones, including a significant increase in Tesla's market cap.
"In order to receive any compensation whatsoever for his work as CEO, Elon needed to meet ultra-ambitious financial and operational targets over a 10-year period," Tesla said. "Elon met these targets, which created tremendous value for stockholders."
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
However, the compensation package was challenged in Delaware's Court of Chancery because some shareholders believed the package was excessive and that Tesla's board of directors were too close to Elon Musk to protect shareholders' interests, according to CNN.
To reinstate the pay package, Tesla held another shareholder vote, with investors also asked to weigh in on the company moving its state of incorporation to Texas from Delaware.
"We believe in stockholder rights," Tesla said. "In Delaware, your vote was not respected."
However, the results of the vote will not immediately reinstate the pay package. According to Reuters, a 'yes' vote will be used as support in Tesla's case to reverse the Delaware judge's ruling against the package.
Additionally, another shareholder filed a suit last week that challenges Thursday's proxy vote.
And even though shareholders approved the measure to move the state of incorporation to Texas from Delaware, Tesla has said it will not use that move to ignore the judge's ruling, Reuters said.
Is Tesla stock a buy, sell or hold?
Most analysts are on the sidelines when it comes to the Magnificent 7 stock. According to S&P Global Market Intelligence, the consensus analyst target price for Tesla stock is $182.88, a discount to current levels. Meanwhile, the consensus recommendation is a Hold.
However, CFRA Research analyst Garrett Nelson is bullish on TSLA stock with a Buy rating and $210 price target.
The result of the vote is good news for Tesla shareholders and was likely passed due to the "overwhelming support of TSLA's large retail investor base, who collectively own roughly 40% of the shares," Nelson says. The approval lifts "a major near-term overhang on the stock, as investors send a strong message of 'staying the course.'"
Nelson adds that Elon Musk "has delivered for shareholders over the past five to six years, meeting the lofty thresholds of his entirely incentive-based compensation plan and there's little reason to doubt this won't continue."
Related Content
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.
-
S&P 500 Hits New High on Jobs Friday Eve: Stock Market Today
The S&P 500 hit a new all-time closing high and most of the stocks in the Dow Jones Industrial Average were higher the day before a critical jobs report.
-
New $6,000 'Senior Bonus' Deduction: What It Means for Taxpayers Over Age 65
Tax Changes If you’re an older adult, a new bonus tax deduction could provide a valuable tax benefit. Here's how it works.
-
S&P 500 Hits New High on Jobs Friday Eve: Stock Market Today
The S&P 500 hit a new all-time closing high and most of the stocks in the Dow Jones Industrial Average were higher the day before a critical jobs report.
-
SPACs, SMRs and How to Invest in the Nuclear Insurgency
Big nuclear deployments are in process, but small modular reactors could be a better way to meet rapidly rising electric power demand.
-
10 Ways to Stay Safe From Grandparent Scams and Other Fraud, Courtesy of a Financial Planner
Scams are increasingly hard to detect, and anyone can be fooled, from older people to educated professionals. Here are 10 ways to avoid becoming a victim.
-
This Is How the Student Loan Bubble Is Primed to Pop, From a Student Funding Expert
Fueled by easy money, inflated tuition and high default rates, the student loan bubble mirrors the 2008 subprime mortgage crisis. We could be headed for a potential financial collapse. What can we do?
-
Big Tech Names Rise Above Broad Weakness: Stock Market Today
Some familiar names enjoyed solid rallies on the resolution of outstanding questions, but macro uncertainty hangs over the broader market.
-
Klarna IPO: Should You Buy KLAR Stock?
The Klarna IPO is expected to be one of the biggest offerings of the year, with the buy-now-pay-later firm expected to start trading next week.
-
Alphabet Stock Pops After Google Antitrust Ruling: What to Know
GOOGL stock is soaring Wednesday after a judge ruled that Alphabet does not have to divest its Chrome browser.
-
7 Mistakes to Avoid When You First Start Investing
Investing brings the opportunity to build wealth, but there are plenty of mistakes that can be made. Here are seven common ones and how they can be avoided.