Bernstein analyst Toni Sacconaghi predicts that Tesla shareholders will not approve Elon Musk’s $56 billion 2018 pay package this week.
At the annual general meeting, Tesla shareholders will vote on Musk’s 2018 pay package this Thursday. Sacchonaghi forecasts that TSLA stock might drop by nearly 5% if Tesla investors do not approve Elon Musk’s pay package.
“I think it’s going to be tough to pass. The math is relatively straightforward. You have to get a majority of votes of shareholders that vote, and part of the challenge for Tesla is that not everyone votes,” Sacconaghi told CNBC.
Sacconaghi has a point. Elon Musk and Tesla have made efforts to get as many shareholders as possible to vote in the upcoming 2024 Annual Shareholders Meeting. For example, in May, Elon Musk said Tesla would contact banks and brokers in Europe so European TSLA stockholders could vote through their proxies.
A few proxy advisory firms have advised voting against Elon Musk’s pay package. The Tesla Board recommends approving the $56 billion pay package.
Tesla Board Chair Robyn Denholm shared her thoughts on Elon Musk’s 2018 pay package a few times leading up to the vote. Recently, she laid out several scenarios that could play out if Tesla investors do not approve Musk’s $56 billion pay package.
“The ratification of the pay package is really about fairness—fairness to our CEO. If you look at what’s happened at the company over the six years—tremendous value creation, and he’s led that,” Denholm said in a recent interview with Squawk Box.
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