A leading Tesla Inc TSLA analyst has outlined a new plan for the board of directors to work on improving the sentiment around the stock.
Historical Context: Tesla has drawn its share of bears over the years, reflecting on previous challenges the company faced.
The analyst, who has an Outperform rating and price target of $315, said Tesla and Elon Musk have been attacked many times over the last 10 years with comments like electric vehicles (EVs) being a fad and Tesla not being able to change the automotive sector.
Ives brought up the overhang on a 2018 compensation plan being voided by a Delaware judge. That added to the fire and brought a new worry for Tesla investors and its board, he says.
Ives outlines three things that Tesla’s board can do to fix the current “Category 5 hurricane” over Tesla’s stock.
- Create a new compensation package that would supersede the 2018 plan voided by the judge.
- Create a new compensation package that takes Musk to the 25% voting share of Tesla he has been requesting. Have shareholders vote on the new plan at the next shareholder meeting.
- Move incorporation of Tesla from Delaware to Texas.
“In summary: For Tesla we believe moving out of Delaware to Texas is the only decision and should resolve the Musk comp package and at the same time take out the uncertainty of Musk and his AI initiatives going anywhere else except under the Tesla hood.”
The Way Forward: The update from Ives comes after a group of 5,821 Tesla shareholders representing 23,337,127 TSLA shares recently sent a letter to Tesla’s board in support of Musk and the Tesla board.
- Shifting Tesla’s state of incorporation from Delaware to Texas.
- Exploring options to keep Musk’s 2018 pay plan in place.
- And designing a new plan along the same lines as the 2018 compensation plan that was struck down.
The shareholders envision a new compensation plan for Musk that includes hitting company milestones like full self-driving reaching level five autonomy, launching the Optimus bot and getting Tesla’s market capitalization to pass $1 trillion.
Ives previously shared 10 ideas that could help Tesla stock after the fourth-quarter earnings report.
TSLA Price Action: Tesla shares were up 1% to $189.56 on Thursday versus a 52-week trading range of $152.37 to $299.29. Tesla shares are down 24% year-to-date in 2024.
