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Musk's pay package not getting approved will be negative for Tesla stock: William Blair's Dorsheimer
11/6/2025, 10:01:04 PM
Economic Summary
- The shareholder vote on Elon Musk's large pay package is pivotal for Tesla (TSLA); failure would likely be a major negative for the stock because much future value is tied to autonomy rather than the core auto/energy business.
- The package ties compensation to extraordinary market-cap targets (roughly $7–7.5 trillion mentioned), implying expectations of massive growth driven by autonomy, robo-taxis, humanoid robots, and potential inorganic deals.
- A separate shareholder proposal around investing in XAI (Musk's AI efforts) signals that investors are considering AI-related inorganic growth as part of Tesla's pathway to those targets.
- The deal raises governance and precedent issues — other firms may evaluate similar retention mechanisms for key founders, while past compensation packages remain entangled in legal processes, creating regulatory and investor overhang.
Bullish
- Passage aligns Musk's incentives to pursue autonomy and could unlock significant shareholder value.
- Approving the plan signals support for inorganic growth and investments (e.g., XAI) to achieve ambitious targets.
- Keeping Musk in control may be critical to executing the long-term autonomy roadmap (robo-taxi, humanoid robots).
Bearish
- If the Tesla pay package fails, it would be very negative for the shares given reliance on autonomy expectations.
- The total dollar size of the package is hard to swallow and raises governance and precedent concerns.
- Targets imply an enormous market-cap leap that may be unrealistic and depend on risky autonomy bets.
Bullish tickers
TSLAXAI
Bearish tickers
TSLA
TSLA
Bullish
If approved, the package could align Musk's incentives to deliver autonomy-led growth and sustain control needed to pursue robo-taxis and humanoid robots.
Bearish
If the pay package doesn't pass, shares would face a significant negative repricing given autonomy-driven expectations.
NVDA
Bullish
Reference to Jensen underscores that other founders can deliver value without oversized, precedent-setting pay packages.
Bearish
Mention of Jensen (called out as not doing such compensation deals) highlights governance alternatives and concern over setting precedents.
AAPL
Bullish
The comparison suggests traditional executive compensation models remain viable for large-cap companies.
Bearish
Tim Cook is cited as an example of a leader who hasn't pursued massive founder-style pay packages, raising governance questions.
XAI
Bullish
Support for investing in XAI could enable AI/inorganic growth that helps meet ambitious autonomy-driven market-cap targets.
Bearish
The XAI investment proposal was shareholder-initiated, not set up by Tesla, so its impact and linkage to Tesla's targets are uncertain.
People mentioned
Jed DorsheimerElon MuskPhilJensen WongTim CookRobin