Tesla (TSLA) is making news again, this time for a move that could determine its leadership and market capitalization for many years to come, not because it is announcing a new factory expansion or car line, but because it has reportedly created a new special committee to consider alternative compensation structures for CEO Elon Musk after his 2018 compensation plan, currently valued at $98 billion, was rebuffed in court. 

The market is reacting positively: TSLA stock is up 32% from April 24 as prospects improve that Musk’s leadership is here to stay.

This governance initiative follows fresh momentum for Tesla stock after a tumultuous period earlier in 2025. While the wider tech market has experienced varied sentiment, Tesla’s leadership actions and future-focused business shifts are stimulating shareholder interest despite ongoing regulatory and financial risk concerns.

About Tesla Stock

Tesla (TSLA) an industry leader in electric vehicles, energy storage solutions, and autonomous driving technology, is headquartered in Austin, Texas, and its market capitalization is more than $1.1 trillion. Tesla’s activities cover vehicle manufacturing, battery technology, autonomous driving software, and energy solutions.

In the past 52 weeks, shares have ranged from a low of $167.41 to a high of $488.54. The stock closed May 19 at $342.09 — 32% above April 24. That recent advance comes on top of a 2.3% dip on May 19, presumably due to profit-taking after the recent advance.

The company’s valuation is still high. The firm’s 251.78x forward price-earnings multiple and 11.5x price-sales multiple far surpass industry norms. These numbers coincide with elevated growth aspirations involving Tesla’s artificial intelligence efforts and robotics initiatives. Such high multiples do little to allow for execution mistakes and place TSLA among more expensively valued large-cap stocks.

Tesla does not pay out dividends and reinvests its cash flow in R&D, artificial intelligence infrastructure, and expansion in Gigafactories. For growth-focused investors, capital deployment that aligns with the company’s overall growth mission is crucial, but it also underscores the need for sustained performance to support premium valuations.

Tesla Considers New Compensation Scheme for Musk

In late April, Tesla released an SEC filing stating that its board set up a special committee to study Elon Musk’s compensation plan. The action comes after a 2024 Delaware court decision invalidated Musk’s prior record-breaking compensation agreement. The new committee consists of Chairwoman Robyn Denholm and board member Kathleen Wilson-Thompson, a relatively small team charged with solving one of Tesla’s most far-reaching leadership issues, according to sources quoted by the Financial Times.

Not only is the committee considering amended terms for a possible new compensation plan, but also different recognition for Musk’s past contributions, if the appeal to the 2018 arrangement is rejected by the court. Any new plan is expected to be performance-based and tied to financial and operational targets as well as stock price targets.

Interestingly enough, the board is holding up its proxy filing, rescheduling its annual shareholder meeting in the process. This allows more time for the committee to prepare a proposal that might appeal to shareholders while keeping Musk on board. 

While shareholders have greeted the news with optimism, there is still uncertainty about how things play out from here. Although Musk recently confirmed he intends to stay on as CEO for the next five years, a loss of Musk’s commitment carries strategic risk factors, particularly with his simultaneous involvement in projects such as xAI, Neuralink, and SpaceX being an added complication. But a carefully defined transaction that is legally vetted and aligns incentives might rebuild confidence and spark additional upside in TSLA stock.

What Analysts Expect for Tesla Stock

Sentiment among analysts is cautiously positive with a “Hold” rating. The average target price for TSLA is $285.92 and carries an implied downside risk of about 17% from its current level. Such a huge gap reveals the discrepancy between Tesla’s momentum in the markets and the more conservative pricing models of the Street. 

Margin pressures, competition from Chinese EV manufacturers, and regulatory overhang are cited by some as grounds for caution while others look towards Tesla’s software monetization and autonomy as drivers in the longer term.