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Tesla (TSLA) investor attention is on the annual shareholder meeting Thursday and the fate of CEO Elon Musk's $1 trillion pay deal. Musk and Tesla have been busy drumming up support, with the Tesla board and Musk himself hinting that he could leave if investors vote down the proposal. In that scenario, TSLA shares could plummet more than 10%, according to one analyst. Just days before the Tesla shareholder meeting, Musk said on the All-In Podcast on Friday that he is not going to purchase a "yacht" if the vast pay deal is approved. However, Musk added that if he is going to scale Tesla's humanoid Optimus robot he needs to have "something like" a 25% stake in the company to have enough control over operations. Asked if the vote does not go Musk's way, the Tesla head would not say definitively if he would leave the EV giant. "Let's just say I'm not going to build a robot army if I can be easily kicked out by activist investors, no way," Musk said. The Tesla CEO made similar statements during the third-quarter conference call, where he made the case for TSLA investors to approve his $1 trillion pay proposal and lashed out at proxy advisory firms Glass Lewis and ISS, which have recommended investors vote against the Tesla board proposal. Musk is currently Tesla's top shareholder, with a 15.8% stake in the company. If shareholders approve the pay deal, Musk could acquire voting control of more than 25% of Tesla shares. Tesla Shareholder Meeting The EV giant holds its annual shareholder meeting after the stock market close Thursday. Along with Musk's pay deal, investors will also vote on Tesla investment in xAI and several other measures. Cathie Wood and Ark Invest, longtime supporters of Musk's vision for Tesla, as well as Baron Capital and others have come out in support of the board proposals while Glass Lewis and ISS have recommended against supporting Musk's pay deal. Retail investors, which hold approximately 40%-45% of TSLA shares, are also widely expected to support Musk's pay deal. It remains to be seen how top institutional investors Vanguard and BlackRock will vote. CNBC reported Tuesday that Norway's $2 trillion sovereign wealth fund says it will vote against Musk's pay package. Norges Bank Investment Management, which manages the fund, told CNBC that "while we appreciate the significant value created under Mr. Musk's visionary role, we are concerned about the total size of the award, dilution, and lack of mitigation of key person risk- consistent with our views on executive compensation." "We will continue to seek constructive dialogue with Tesla on this and other topics," Norges Bank Investment added. Meanwhile, the New Mexico State Investment Council has advised its proxy, Northern Trust Asset Management, to also vote against the pay deal, The Albuquerque Journal reports. Polymarket as of Tuesday shows a 94% chance Musk's pay package passes. Tesla Board Chair Robyn Denholm last week sent a letter to shareholders asking if they "want to retain Elon as Tesla's CEO," hinting at the importance of the annual meeting. "Tesla's Nov. 6 shareholder meeting could go down as one of the most important events in the history of the company. While most observers and betting markets expect Elon Musk's widely publicized and extensively analyzed $1 trillion long-term compensation package will pass shareholder approval, there is the distinct possibility that it does not," Morgan Stanley analyst Adam Jonas, a Tesla bull, wrote on Oct. 30. Jonas added that the TSLA reaction "would likely be an immediate sell-off in the shares," potentially more than 10%, with a "further 'pall' over the strategic future of the company, bringing our bear case share price projections into play." Bank of America analyst Federico Merendi on Oct. 31 also wrote that the vote on Musk's pay deal "poses significant risk to the stock" and if it doesn't pass, Musk could focus his efforts on his other ventures or step down from his role, leading to a negative stock reaction. Tesla Stock Performance TSLA fell about 2% to 458.10 during Tuesday's stock market, as it retreated after flirting with a breakout on Monday. Tesla stock jumped 2.6% to 468.37 on Monday, trading around a traditional buy point of 470.75, part of a base going back to late December, according to MarketSurge charts. TSLA shares briefly jumped to 474.07 on Monday, moving above that buy point. At Monday's stock market close, Tesla stock was also just 4% below its all-time of 488.54. Following Q3 earnings on Oct. 22, CFRA Garrett Nelson maintained his sell rating on TSLA following earnings. Nelson wrote that the "release and conference call did not do enough to address concerns surrounding the company's near-term earnings growth trajectory, with management passing on a couple of conference call questions related to future products." Tesla Earnings Call Didn't Mention This One Word Again "TSLA's Energy Storage and Generation business continue to help support sales and margins in the face of weaker Automotive growth, and we think execution risk is high, with the company having promised volume production of the Cybercab, Semi, and Megapack 3 in 2026. In the absence of new developments, we continue to view the stock as susceptible to multiple contraction as investor focus shifts to the company's annual meeting on Nov. 6," Nelson wrote on Oct. 23. Investors can also keep tabs on the Leaderboard, the IBD 50 list of top growth stocks and IBD SwingTrader along with the IBD Sector Leaders list. Tesla stock has an 83 Composite Rating out of a best-possible 99. TSLA also has a 92 Relative Strength Rating and a 47 EPS Rating. Please follow Kit Norton on X @KitNorton for more coverage. YOU MAY ALSO LIKE: Why This IBD Tool Simplifies The Search For Top Stocks
