Elon Musk's $56B pay package to get "overwhelming" support at shareholder meeting.

According to a report by Wedbush on Thursday, a significant vote on whether to re-approve Tesla CEO Elon Musk's $56 billion compensation package is expected to pass "overwhelmingly" at next week's annual shareholder meeting. This may help alleviate concerns about Tesla's stock.

The compensation package was approved in 2018, but an adverse ruling by a Delaware court earlier this year on shareholder-approved compensation forced Tesla to bring the package back for re-approval.

Despite recommendations from some shareholders, such as the Institutional Shareholder Services, to vote against the $56 billion compensation package, Wedbush believes it will be "overwhelmingly re-approved" at the June 13th shareholder meeting.

In addition to the compensation package, Tesla's plan to move from Delaware to Texas will also be voted on and, if approved, will be implemented.

Wedbush stated that the ongoing controversy over the compensation package is one of the many uncertainties surrounding Tesla's stock, but its approval would be a significant step toward eliminating this "distraction." In a competitive Chinese market and with slowing electric vehicle sales, many are questioning Tesla's demand.

However, at the shareholder meeting, Musk has the opportunity to shift market perceptions by emphasizing that autonomous and fully self-driving technology are the future of Tesla.

Wedbush stated, "We believe that autonomous and fully self-driving technologies are crucial to Tesla's future, and Musk needs to make this clear at next week's shareholder meeting," while also highlighting the importance of launching low-cost models.

"The successful launch of low-cost models and increased demand in the key Chinese market must be flawless...otherwise, this could undermine the bullish thesis on Tesla over the next 6 to 12 months," Wedbush added.

A positive shareholder meeting will help build momentum for the anticipated Tesla event on August 8, when the eagerly awaited robotaxi is expected to be unveiled.