How to trade Tesla’s $56 billion Musk compensation package vote on June 13
Institutional investors split, retail likely to vote for Musk compensation package but will turnout be high enough?
Institutional investors split, retail likely to vote for Musk compensation package but will turnout be high enough?
Tesla is seeking support from its large base of retail investors for Elon Musk's controversial $56 billion compensation package ahead of a pivotal 13 June annual shareholder meeting. The pay deal was struck down by a court, but Tesla has asked investors to reaffirm it anyway. The vote on the pay package is seen as a referendum on Musk's leadership.
Major institutional investors are divided on the issue. Some, like T. Rowe Price, have endorsed the pay plan as aligned with shareholder interests. But others, like CalPERS, say the pay is excessive given Tesla's performance.
Retail investors, who own an unusually high percentage of Tesla shares, generally favour management in these situations. However, they also tend to not bother voting. Getting retail investors to actually cast ballots is a major focus of Tesla's outreach efforts.
The June 13 meeting will also cover Tesla's proposal to reincorporate in Texas and re-elect two board members, including Musk's brother. But the pay package vote is the primary focus. Musk has claimed 90% retail investor support so far, which would be typical. Still, getting retail shareholders to turn out remains Tesla's main challenge.
The “Street’s” view of what the pay deal vote will mean for the Tesla share price
If the vote for Elon Musk’s $56 billion compensation package passes, Tesla stock should have a positive response, at least in the short-term, as it shows investors backing Musk’s leadership.
If Musk's pay deal is rejected, the Tesla stock would likely fall, potentially by as much as 5%, according to some fund managers.
Tesla technical analysis
The Tesla share price decline from its $299.29 July 2023 peak has taken it to its April low at $138.80 before its share price rallied by around 40% post better-than-expected earnings to its $198.87 late April high, only to slip back towards the $170.00 region.
Tesla Weekly candlestick chart
For the past month the Tesla share price has been range trading above its 55-day simple moving average (SMA) at $173.78 which, on several occasions, acted as support.
If a fall through and daily chart close below the 10 May low at $167.75 were to be seen, the March and early-April lows at $160.51 might be revisited.
Tesla Daily candlestick chart
If, however, a rise above the 21 May high at $186.88 were to ensue, not only the late-April high at $198.87 but likely also the February peak at $205.60 could be back in the frame. Further up meanders the 200-day SMA which also represents a possible upside target.
Tesla analyst ratings
LSEG Data & Analytics data shows a consensus analyst rating of between a ‘buy’ and a ‘hold’ for Tesla – 7 strong buy, 13 buy, 20 hold, 6 sell and 4 strong sell (as of 11 June 2024).
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