Tesla’s proposed pay plan for CEO Elon Musk is viewed as a “good deal” for Tesla investors, alleviating concerns regarding the executive’s long-term commitment to the company, as stated by auto research analyst Adam Jonas. Tesla’s board is requesting that investors approve a new compensation plan for Musk, which could be valued at approximately $975 billion, provided the share count stays the same. Nearly a trillion dollars is a significant figure, yet it appears relatively modest when considering the vast market opportunity for Tesla, particularly when accounting for the potential scale of AI humanoid robots, Jonas stated.

“In our view, on the eve of scaling physical AI and advanced AI-enabled manufacturing on US shores, we believe Elon Musk has an incentive to focus on Tesla more than ever.” “At the same time, there is no clear near-term succession plan at this time,” Jonas wrote in a Sept. 7 note. “While the proof is in the execution, at face value, the proposed compensation package aligns Tesla minority shareholder interest with those of Elon Musk in a way that incorporates operational milestones, profitability milestones and value creation milestones (market cap) while cementing a long-term commitment to the company,” he added.

Jonas maintained his overweight rating and $410 price target on the stock, but has removed Tesla from his list of ‘top picks.’ Tesla shares are down about 14.3% year to date, but have climbed back 9% over the past quarter. The electric vehicle maker is increasingly evolving into a robotics company, with Musk recently stating that 80% of Tesla’s value will eventually derive from its humanoid Optimus robots.