Black said in an X post on Monday that he expects the new compensation plan to receive 70% to 75% votes at Thursday’s annual meeting.
- The Future Fund’s Managing Partner expects Musk to put forth “high optimism” regarding the company’s efforts towards unsupervised vehicle autonomy.
- He, however, highlighted the company’s extended valuation as compared to earnings growth.
- Black added that investors are underestimating the abilities of Chinese competitors in scaling autonomous driving.
As Tesla’s (TSLA) annual shareholder meeting nears, The Future Fund Managing Partner Gary Black expects Elon Musk’s new pay package worth about $1 trillion to receive “overwhelming approval.”
The analyst said in an X post on Monday that he expects the new compensation plan to receive 70% to 75% votes at Thursday’s annual shareholder meeting.
Expectations From Musk
Black expects Musk to put forth “high optimism” regarding the company’s efforts towards unsupervised vehicle autonomy. However, he also sounded concerned, highlighting the company’s extended valuation as compared to earnings growth.
“We believe investors are too optimistic about how quickly TSLA can roll out L4/L5 unsupervised robotaxis globally and are underestimating Chinese competitors’ abilities to scale their own unsupervised autonomy,” Black wrote. Tesla pilot launched its robotaxi services in Austin, Texas, in June, before also launching them in San Francisco. However, the vehicles have a safety monitor in the front seat to take over as required.
Black believes that the major catalyst for Tesla going forward would be the removal of safety monitors from the driver’s seat in all robotaxis. The move would signal an imminent scale-up of robotaxis, he noted. The analyst keeps a $310 price target on Tesla shares.
On Stocktwits, retail sentiment around TSLA stock stayed within the ‘bearish’ territory while message volume fell from ‘normal’ to ‘low’ levels.
Musk’s New Package
Tesla proposed a new compensation package for Musk, valued at approximately $1 trillion, in September. According to the new pay plan, Musk will receive no salary but will be awarded up to 423.7 million shares of Tesla in installments over 10 years, contingent upon the company meeting certain milestones, including increases in earnings, vehicle deliveries, robotaxis, and humanoid robots.
The new package is designed to deliver approximately 12% more voting power to Musk in exchange for driving performance growth, including by taking the company’s total market capitalization to $8.5 trillion. Tesla shareholders must now approve the package, and the results of the shareholder vote will be announced at the company’s annual meeting of shareholders on November 6.
Musk’s previous pay package, initially approved in 2018 and valued at over $50 billion, was voided by a Delaware court, which deemed it excessive, last year. Musk appealed the court’s order in March, and Tesla established a special committee to consider matters concerning Musk’s pay, including evaluating a new pay package.
Robotaxi Pivot
Musk is currently attempting to pivot Tesla toward vehicle autonomy and robotics in addition to EV manufacturing.
“We are expecting to have no safety drivers in at least large parts of Austin by the end of this year. Within a few months, we expect to have no safety drivers at all, at least in parts of Austin,” Musk said on Tesla’s earnings call last month about safety drivers on robotaxis.
The Tesla CEO, however, added that the company is being “very cautious” about the deployment. “Just to make sure that we’re being paranoid about safety, I think it makes sense to have a sort of either safety driver or safety occupant in the car when we first go to new markets to just confirm that there’s not something we’re missing,” he added.
Musk also added that the company intends to operate the robotaxi in about eight to 10 metro areas by the end of the year, marking a scale-down of his former ambitions of reaching half the U.S. population.
TSLA stock is up 16% this year and approximately 93% over the past 12 months.
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