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Tesla (TSLA) is in focus on Monday following news the EV maker has awarded 96 million of its shares as an interim pay package to its billionaire chief executive, Elon Musk. At the current price of $308 per share, the announced pay package essentially translates to roughly $29 billion, which will vest in two years, as per the automaker’s filing with the SEC today.
Tesla stock has recovered sharply from its April low, but has been consolidating near the $300 level in recent weeks.
Significance of Musk’s Pay Package for Tesla Stock
The interim pay package is significant as it signals TSLA’s commitment to retaining Musk amidst leadership uncertainty and fierce competition.
Tying $29 billion in equity to his continued role may enable the multinational to stabilize investor confidence and ensure strategic continuity, especially as Tesla pivots toward artificial intelligence (AI) and robotics.
Supporters argue that Elon Musk’s vision is irreplaceable and this decision removes a major overhang on TSLA shares. Critics, however, may see it as excessive, especially given recent earnings declines and governance concerns.
Piper Sandler Reiterates Bullish View on TSLA Shares
Tesla shares are currently trading about 15% below their recent high, which Piper Sandler analyst Alexander Potter views as an opportunity for long-term investors to load-up on the EV stock.
In his research note on Monday, Potter said “shareholders shouldn’t be losing sleep” over TSLA’s legal battles, sales slowdown, or valuation metrics.
Why? Because the analyst believes the company’s commitment to Full Self-Driving (FSD) will dictate its stock price trajectory in the years ahead. Note that CEO Musk recently predicted that about 50% of the U.S. population will have access to Tesla’s unsupervised Full Self-Driving (FSD) by 2026.
Piper Sandler currently has a $400 price target on TSLA stock, indicating potential upside of more than 29% from here.
Wall Street Rates Tesla Stock a ‘Hold’
Investors should still practice caution, as other Wall Street analysts do not share Potter’s optimism on Tesla stock.
According to Barchart, the consensus rating on TSLA shares currently sits at “Hold,” with the mean price target of about $300 indicating potential downside of more than 3% from current levels.
