Tesla’s upcoming shareholder vote on June 13 will play a significant part in the company’s “long-term strategic direction,” Morgan Stanley analysts said in a Friday note.
“While impossible to predict the outcome, we expect the event could drive material volatility in the stock,” analysts at Morgan Stanley wrote.
Tesla (NASDAQ:TSLA) shareholders will vote on several important matters at the forthcoming annual meeting, including whether to re-approve CEO Elon Musk's substantial compensation package.
Earlier this year, a Delaware judge criticized the pay package as "excessive," supporting an investor who filed a lawsuit against Tesla, arguing that Musk's $55.8 billion deal was unwarranted.
Tesla is the only company within Elon Musk's network of businesses where he lacks control or a blocking minority vote, Morgan Stanley pointed out.
While all of his companies are somewhat linked to AI, he has voiced concern about advancing Tesla's role in this area without securing roughly 25% voting power, citing potential risks if this "powerful technology goes awry."
“While an approval of the Tesla CEO's 2018 pay package would not, by itself, give Elon Musk a 25% voting block, we view the outcome as significant,” analysts commented.
“From our investor discussions, we find that while some are aware of the June 13th shareholder meeting/voting date, there is a surprisingly little amount of attention being paid to its significance to the performance of the stock,” they added.
Apart from Musk’s compensation package, Tesla shareholders will also vote on the relocation of Tesla's headquarters from Delaware to its operational base in Texas.