Tesla Shareholder Vote: A Tale of Two Camps and Elon Musk’s Uncertain Future

Elon Musk’s pay package at Tesla has once again sparked debate with a recent shareholder vote to reinstate the compensation plan. While some analysts interpret this as a strong endorsement of Musk’s leadership, others are skeptical, raising concerns about Tesla’s future and Musk’s dedication to the company.
A Package Worth Billions, But Not Everyone’s Approval
Originally approved in 2018, Musk’s $56 billion compensation package, consisting of stock options, faced scrutiny when a Delaware Chancery Court judge deemed the approval process flawed in January 2024. This week, Tesla shareholders voted again, with a 77% majority reinstating the package, now valued at $46 billion due to a decline in Tesla’s stock price.
At the shareholder meeting, Musk expressed gratitude and confidence. However, underlying unease persists. Early investor Ibrahim AlHusseini, despite voting in favor, cited a fear of loss influencing shareholders. He fears this short-term mindset may obscure deeper issues, predicting a potential stock drop next quarter due to missed delivery targets and profit margin shortfalls.
Focus on Musk, or Focus on Tesla?
This short-term focus concerns Brad Lander, the New York City Comptroller, who oversees pension funds with significant Tesla holdings. Lander views the approval as a “mistake,” worrying whether Musk will now concentrate fully on Tesla or become sidetracked by other ventures and social media disputes.
Investors Divided: From Outrage to Pragmatism
The investor community is split. Longtime Tesla supporter Ross Gerber, who initially approved the package in 2018, opposed it this time, deeming it “outrageous.” Despite his reservations, Gerber respects the democratic process and accepts the vote’s outcome.
Analyst Optimism: Full Speed Ahead with Musk at the Wheel
Contrary to investor concerns, some analysts see the vote as a positive for Tesla. Analysts like George Gianarikas and Dan Ives emphasize Musk’s crucial role in Tesla’s success, particularly in self-driving technology. Gianarikas underscores Musk’s importance, while Ives predicts Tesla’s valuation could exceed $1 trillion by 2025 if Musk remains focused.
A Voice of Caution: Don’t Get Blinded by the Hype
Not everyone is optimistic. Dave Harden of Summit Global Investments warns against buying Tesla stock now, fearing potential dilution for existing shareholders due to the large stock option package. He also doubts Tesla’s unproven ventures in AI and robotics, suggesting the major growth phase in electric vehicles might already be over.
Harden advises caution, recommending investors hold off on buying Tesla shares or consider selling existing holdings until Tesla’s growth trajectory becomes clearer.
The Road Ahead: Unanswered Questions and Uncertainties
The shareholder vote has reinstated Musk’s pay package but hasn’t resolved the underlying anxieties. Will Tesla leverage its technological edge to achieve the lofty valuations some analysts predict? Or will Musk’s attention waver, jeopardizing the company’s future growth? These questions remain unanswered, casting uncertainty over Tesla’s future and Musk’s role. Only time will reveal how this drama unfolds.