Future Fund Managing Partner Gary Black believes Tesla Inc. TSLA CEO Elon Musk‘s $56 billion pay package will be passed “easily” at the annual shareholders’ meeting on Thursday given a majority of shareholders have voted in favor of it yet again.
What Happened: “I cannot see DE Chancery Court Judge McCormick trying a second time to overturn the will of TSLA shareholders who again approved by a 3:1 margin Elon's 2018 comp plan…,” Black said in a post on social media platform X, formerly Twitter.
Black’s comments come on the heels of Musk announcing that a majority of shareholders who have voted thus far voted in favor of his package and moving Tesla’s state of incorporation to Texas from Delaware. He added that the two resolutions are “currently passing by wide margins.”
However, the final results of the vote will only be announced at the shareholders’ meeting at Tesla’s headquarters scheduled for 4:30 p.m. ET, June 13.
Musk’s pay package in question was rescinded by a Delaware court earlier this year after deeming it an "unfathomable sum." Musk soured on Delaware after the verdict and Tesla’s board is now attempting to have it reinstated with yet another shareholder vote.
Though the vote by itself won’t determine the future of Musk’s package, it will give the company sufficient leverage in the Delaware court.
Bull Explanation: Black, however, is optimistic. The fund manager does not see the court overturning a shareholder vote yet again to shoot down the package. He also opined that the favorable vote should lift any concerns of the CEO leaving the company.
Black now expects Tesla to rebound 3-5% over the next few days, after which investor focus will return to the company’s second-quarter deliveries which he expects to be lower as compared to the corresponding quarter last year.
However, the “wild card” will be the robotaxi unveiling event scheduled for Aug. 8, which could either take the stock higher or lower depending on whether Tesla unveils the unsupervised version of its full self-driving software which will enable vehicle autonomy, he said.
“We remain $TSLA bulls but wouldn't get too carried away,” Black added.
Why It Matters: The current shareholder vote results are despite proxy advisory firms Institutional Shareholder Services (ISS) and Glass Lewis recommending shareholders vote against Musk’s package.
U.S.’ largest pension fund California Public Employees’ Retirement System (CalPERS), which is among the top 30 investors in the EV company, also said that they will be voting against the package.
Other proposals up for shareholder vote include the re-election of Kimbal Musk and James Murdoch to the board.
Price Action: Tesla stock closed at $177.29 on Wednesday, up 3.88% for the day. In after-hours trading, the stock rose to $178.10, gaining 0.46%. However, year to date, Tesla's stock has seen a significant decline of 28.63%, according to the data from Benzinga Pro.
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