Tesla shareholders are unlikely to pass Elon Musk’s $56 billion pay package Thursday — which will pressure the company’s stock on fears that the CEO could leave the electric vehicle maker — Bernstein told clients in a note Monday. About 25% of eligible voting shares are held by passive shareholders who will likely follow the “no” recommendation of Institutional Shareholder Services and Glass Lewis, or by institutional investors who have already said they plan to vote against the pay package, analyst Toni Sacconaghi said in a note. Tesla has never seen turnout higher than 63% in a shareholder vote, Sacconaghi wrote. Even assuming turnout is much higher at 75%, Musk would need 73% of unaccounted for voters to back his pay package, the analyst said. Tesla garnered a 73% “yes” vote on Musk’s original pay package in 2018, Sacconaghi said, but it was a much less controversial vote where passive shareholders backed the package. “We believe that if the pay package is rejected, the stock would likely be down (potentially 5%+) amid fears that Musk might leave Tesla,” Sacconaghi wrote. “If the vote passes, we expect the stock would have a positive response, but likely more muted.” Sacconaghi rates Tesla as underperform with a $120 price target, implying 32% downside from Friday’s close. “Tactically, we believe investors may be underestimating the risk that Elon’s pay package is rejected, so risk/reward into the shareholder vote currently appears to skew to downside,” the analyst said. Tesla shares have tumbled nearly 30% in 2024. TSLA YTD mountain TSLA year to date