On the eve of the Tesla shareholders meeting, CEO Musk announced on social media that his compensation plan and the headquarters resolution have received a significant proportion of approval.

Tesla's $56 billion compensation plan is steady.

According to Musk's post on social media, the two resolutions were to re-approve its $56 billion compensation plan and the proposal to move Tesla's headquarters from Delaware to Texas. Both resolutions were passed with a "large margin," according to Musk. The annual shareholder meeting of Tesla is set to be held on June 14th Beijing time, but the vote on these two resolutions was conducted early. The deadline for investors' votes was 10:59 pm Central Time on June 12th, and it will be translated to 11:59 am on June 13th in Beijing time. Previously, Musk stated on social media that about 90% of Tesla's retail shareholders supported the two resolutions.

According to the previously published news, the annual shareholder meeting of Tesla will be held early in the morning of June 14th Beijing time, but the vote on these two resolutions was conducted early. The deadline for investors' votes was 10:59 pm Central Time on June 12th, and it will be translated to 11:59 am on June 13th in Beijing time. Previously, Musk stated on social media that about 90% of Tesla's retail shareholders supported the two resolutions.

Among them, Musk's $56 billion compensation plan was the most concerned agenda of this shareholder meeting. In January this year, the compensation plan was declared invalid by a court in Delaware. Later, Tesla asked its shareholders to revote on it at its annual shareholder meeting.

Supporters and opponents of the proposal had clear points of view. Supporters of the proposal include Scotland's asset management company Baillie Gifford & Co, Cathie Wood's Ark Investment Management, and Ron Baron, head of Baron Funds.

Baron is a long-term investor in Tesla and, roughly estimated, has earned billions of dollars on his investment. In an open letter, he said that the shareholder's will (Musk's compensation plan) starting from 2018 should be supported. If it wasn't for Musk, there would be no Tesla, and this vote could determine whether he will stay with the company. As a contribution to Tesla, if Elon performs well, this is what he deserves. Elon is a key figure, and without him there would be no Tesla.

"How can you change your mind, especially when all directors and shareholders have approved it? It's crazy," Baron emphasized.

Cathie Wood also benefited from investing in Tesla and is a loyal supporter of Musk. Through her fund, she invested in several of Musk's companies, including SpaceX. She said on social media, "After Elon and the shareholders have overcome many difficulties and made Tesla the best-selling car globally, how could shareholders go back on the compensation plan? It doesn't make sense!"

Opponents of the proposal include global head sovereign wealth fund Norges Bank. The institution stated that it highly praises the value Musk has created for Tesla but is concerned about the overall size of the compensation plan, performance trigger structure, equity dilution, and mitigation measures for key personnel risks, among other things.

In addition, CalPERS, the largest public pension fund in the United States, also does not approve of this proposal. The head of the organization, Marcie Frost, explicitly opposes Musk's compensation plan because "his compensation is not commensurate with company performance."

The opposition alliance of Musk's compensation plan also includes a long list of institutions such as Amalgamated Bank, the audit office of the City of New York, asset management company Nordea, Danish pension fund AkademikerPension, and investment group SOC.

Tesla's chairman Robyn Denholm has been in contact with large institutional investors, and Tesla has also released several ads on the social platform X, hoping that this high-priced compensation plan will be supported by shareholders.

Can Tesla's stock price continue to rise?

If this compensation plan is approved, it will greatly reduce the likelihood of Musk leaving Tesla. The investment value of Tesla will be re-evaluated by the market.

Since the second half of last year, Tesla's stock price has continued to fall, accumulating a drop of about 40% from last year's high. Tesla rose 3.88% on Wednesday, and the latest quote was $177.29/share. As of the revision, Tesla rose nearly 7% before the opening of the market.

The latest report from Cathie Wood's Ark Investment Management shows that as this electric car manufacturer develops into a more profitable robot taxi company, its stock price will soar 12.5 times within five years, reaching $2,600.

The company stated in a report: "ARK's updated open-source Tesla model is expected to be worth $2600 per share in 2029." As of Wednesday's close on the US stock market, Tesla's stock price is only about $177.

The reason for the report's bullish outlook on Tesla's future is that it is expected that by 2029, nearly 90% of Tesla's enterprise value and profits will be attributed to its autonomous taxi business, which is expected to have a much higher profit margin. By 2029, electric vehicle business is expected to account for about a quarter of Tesla's total sales revenue, but only about 10% of the company's profit.

According to the report, the model predicts that Tesla's annual revenue will reach $1.2 trillion by 2029, about 12.4 times its revenue of $96.8 billion in 2023. The company's enterprise value, or the value of all its assets, is expected to reach $82 trillion. The report also sets a "bear market" target price of $2000 for Tesla stock in 2029 and a "bull market" target price of $3100.

In response to the report on Wednesday, Elon Musk said, "Very challenging, but achievable." Of course, there are also many analysts who express doubts about Tesla's future.

Morgan Stanley analyst Adam Jonas pointed out several unfavorable factors that currently plague Tesla in a report released earlier this year, including: declining demand for electric vehicles; outdated product lineup compared with other automakers; fierce competition and price wars from the Chinese market as well as the increasing popularity of hybrid cars in the US market.

The analyst made the following four predictions: Tesla's first-half performance will fall short of expectations; it will withdraw its price reduction measures; the full-year sales expectation will be lowered; the full-year auto gross margin will be lowered.

Jonas even mentioned the possibility of losses in Tesla's auto business, saying, "If Tesla could announce its GAAP pre-tax loss for its auto business at any time, that is likely to be this year."

Despite all this, Jonas still remains bullish on Tesla because he still believes it has the potential to become an AI company.

Editor/new