All The Tesla CEO's Men (And Women): Elon Musk's Inner Circle Lobbies Hard For His Pay Plan Ahead Of Crucial Board Meet

Tesla, Inc.’s TSLA annual shareholder meeting is just a day away, and the biggest question mark isn’t about the company’s future – it’s about CEO Elon Musk‘s. Shareholders will decide the fate of his controversial compensation plan, a decision that could lift a cloud over Tesla’s stock… or send it spiraling.

What’s At Stake: Back in January, a Delaware court threw a wrench into Musk’s original pay package, which awarded him stock options tied to Tesla’s performance, after a shareholder lawsuit.

Now, Tesla is pushing shareholders to ratify the pay plan. But there’s a twist: Musk has hinted that a rejection could lead to him scaling back his involvement with the company, potentially spooking investors.

See Also: Everything You Need to Know About Tesla Stock

Team Musk Rallies: In a full-court press, several Tesla executives have taken to social media to champion Musk’s pay plan.

• Tom Zhu, Senior Vice President (Automotive) and the mastermind behind Tesla’s China success story, praised Musk’s “wisdom, courage, and decisiveness” as crucial to achieving Tesla’s ambitious vision. “Our shareholders are surely aware of how extraordinary our journey has been. If you look forward to realizing Tesla’s grand vision with us, please give Elon and the Tesla team your full trust by taking 5 minutes to vote,” he said.
• Troy Jones, Vice President of Sales & Service, highlighted how Musk defied early naysayers and delivered massive shareholder value. Musk “took the challenge head on, disrupting multiple legacy industries, producing self-driving electric vehicles at scale, and creating massive value for shareholders in the process,” he said.
• Ashok Ellusamy, Director of Autopilot Software, argued that Musk’s leadership is the key driver of Tesla’s advancements in artificial intelligence. “It is his combination of deep technical understanding, insane perseverance and relentless hard work that have positioned Tesla to be a leader in real-world AI,” he said. “We need Elon Musk to push the frontier, because he sees it already.”

Board Chair & Ex-General Counsel Join In: Tesla Chair Robyn Denholm has been a vocal advocate for Musk’s pay plan, emphasizing fairness. In a recent interview with CNBC, she pointed to the significant gains shareholders have enjoyed under Musk’s leadership. “The only person who hasn’t been paid is actually the leader of the company, Elon,” she said. “The right thing for Tesla at this time is for Elon to continue to be at the helm, and this, ratification of the comp plan is exactly about that.”

Similarly, Todd Maron, Tesla’s ex-general counsel who helped draft the initial plan, calls it “the most shareholder-friendly pay package ever conceived.”

Analyst Predictions: Analysts are divided on the vote’s outcome and its potential impact on Tesla’s stock price.

• Bernstein analyst Toni Sacconaghi predicts a potential 5% stock-price drop if the plan fails, citing the recommendations of proxy advisory firms like ISS and Glass Lewis against it. These firms advise large investors on voting decisions.
• Altimeter Capital CEO Brad Gerstner, on the other hand, believes the hefty pay is justified given Musk’s past performance, especially during Tesla’s early, resource-strapped days. “Nobody else I know in business would have accepted an all-performance pay package for a company that CNBC was reporting was on the verge of bankruptcy,” he said. “Pay the man his due. He works his butt off. He's the most innovative CEO we have in America.”

Price Action: With this uncertainty clouding the air, Tesla’s stock price has taken a hit, falling over 31% year-to-date and experiencing volatility in the lead-up to the vote. Tesla shares closed Tuesday down 1.8% at $170.66, according to data from Benzinga Pro, and were down marginally in after-hours trading.

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