Ahead of Tesla Inc.'s (NASDAQ:TSLA) shareholder meeting, where the investors will vote on several key decisions, analysts remain divided in their predictions over CEO Elon Musk’s trillion-dollar pay package.
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Dan Ives Bullish On Package Approval, Adam Jonas Exercises Caution
Wedbush Securities' managing director, Dan Ives, predicted that the package would receive approval in a new investor note shared on Wednesday, saying that the pay package receiving shareholder approval would be a "big step" toward Tesla's autonomous roadmap.
"We expect shareholders to show overwhelming support tomorrow for Musk and the xAI stake," Ives said, adding that the approvals would turn Tesla into an "AI juggernaut."
Meanwhile, Morgan Stanley analyst and Tesla bull, Adam Jonas, exercised caution ahead of the meeting. Jonas said the vote was "one of the most important events in the history of the company," in a note on October 30.
However, Jonas also pointed out that a failed vote could be seen as a "vote of no confidence" in Musk's role as the CEO, adding that it could trigger a 10% or greater selloff. He had earlier claimed that Musk and Tesla had "solved" autonomous driving.
Gary Black Recommends Voting Yes, Gene Munster Says Vote Is Personal For Elon Musk
Investor Gary Black, who is the managing director of the Future Fund LLC, when asked about his recommendation for investors for the pay package, said he'd recommend voting for the package. He had predicted that the package would receive approval from the investors earlier.
Elsewhere, investor Gene Munster of Deepwater Asset Management offered a balanced view on the pay package, saying that Musk's current 15% voting control over Tesla "is too small to ensure his job security," He also outlined that the vote has "become personal" for Musk.
He ultimately predicted that the package would receive approval from the investors during the meeting. "The reason I think the vote will ultimately pass is that shareholders win along with Elon."
Cathie Wood Weighs In, Charles Schwab Will Vote Yes
Investor Cathie Wood, who’s the CEO of ARKInvest, questioned why investors would want to vote against the package “when they and their clients would benefit enormously if he and his incredible team meet such high goals.”
She had previously predicted that the package would receive approval and criticized proxy advisory firms Glass Lewis and Institutional Shareholder Services (ISS) for recommending to vote against the package.
Elsewhere, investment firm Charles Schwab, in a statement to Benzinga, said that it would be voting in favor of the package. “Schwab Asset Management intends to vote in favor of the 2025 CEO performance award proposal,” the firm said amid criticism from Tesla faithful on social media.
Substantial Opposition From Major Investors
The package has received opposition from investors like Ross Gerber, co-founder of Gerber Kawasaki, as well as Norway’s Sovereign Wealth Fund NBIM, which holds over $17 billion in Tesla assets. “We are concerned about the total size of the award, dilution, and lack of mitigation of key person risk,” NBIM had said in a statement.
Musk’s trillion-dollar pay package has also received criticism from the California Public Employees Retirement System (CalPERS), which will reportedly vote against it. Interestingly, CalPERS holds over $2.3 billion in Tesla shares and its opposition to the packet could prove to be a hurdle for Musk.
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