Barclays reiterated its Equalweight rating and $360 price target on Tesla on Monday, unpacking the implications of the company’s filing to register approximately 304 million shares tied to CEO Elon Musk’s 2018 compensation package.
Analyst Dan Levy estimated that the award would increase Musk’s ownership by roughly four percentage points, but noted that reaching the CEO’s stated 25% target would require further dilution beyond what even the separate 2025 compensation plan can deliver.
Tesla filed a Form S-8 with the SEC on Monday to register 303,960,630 shares of common stock connected to the 2018 CEO Performance Award, after Musk signed an implementation agreement with the company on April 21 to exercise the award.
The filing follows the Delaware Supreme Court’s December ruling reinstating the 2018 pay plan, which overturned rejections by the Court of Chancery in January 2024 and December 2024.
Pay Package
The package has been the subject of a closely watched corporate litigation case.
In June 2018, Tesla shareholder Richard Tornetta filed a derivative lawsuit alleging Musk had coerced the board into approving excessive compensation.
Following a five-day trial, a Delaware Court of Chancery judge ruled in January 2024 that Musk had exerted significant influence over the process and ordered the full rescission of the plan.
Tesla responded on multiple fronts.
The company reincorporated in Texas, and a majority of disinterested shareholders voted to reaffirm the 2018 package in a second vote in June 2024.
The Court of Chancery rejected that vote as legally ineffective in December 2024, and awarded the plaintiff’s lawyers $345 million in fees.
On appeal, the Delaware Supreme Court reversed the rescission on December 19, 2025, finding that it was neither possible nor equitable to restore both parties to their original positions.
The court noted that Musk could not undo six years of effort, and that shareholders could not return the benefits they had received.
The compensation plan grants Musk options to purchase approximately 304 million restricted shares at a strike price of $23.34 per share.
Musk must exercise the award in full between May 21 and August 15.
Exercising will cost approximately $7.1 billion, which can be paid in cash or shares.
The shares will cliff vest on January 19, 2028.
Musk cannot sell the shares — aside from sales needed to cover tax obligations related to vesting — for five years after vesting, implying he can begin selling after January 19, 2033.
Musk will owe tax when the shares vest, which can also be paid in cash or shares. He has noted in the past that taxes would “cost” approximately 45% of the shares if paid with stock.
Ownership Impact
When the pay package plan was introduced in 2018, Tesla was valued at roughly $70 billion.
To unlock the full award, the company needed to reach a market capitalization of $650 billion — a threshold it has since far surpassed.
Musk reached the final milestone in December 2021.
Levy estimated that the net effect on Musk’s stake will depend on how he covers the strike price and the tax bill.
Assuming both are paid with shares at a stock price of $370, the analyst wrote that “the 2018 comp package would increase Elon’s Tesla ownership by ~4.0% to ~16.8%.”
According to the 13G/A filing made public alongside the S-8, Musk beneficially owns 717,112,739 shares of Tesla common stock, equivalent to 20.3% of the class.
That figure includes 413,152,109 shares held by the Elon Musk Revocable Trust and the 303,960,630 option shares exercisable within 60 days of April 21 under the implementation agreement.
Getting to Musk’s stated target of 25% ownership, however, will require more.
Barclays estimates that even if Musk hits all targets under the 2025 compensation plan — approved by over 75% of shareholders at the November annual meeting — he would receive approximately 424 million shares pre-tax, or roughly 233 million shares after a 45% tax rate, lifting his ownership to about 22.2%.
Levy noted, however, that the 2025 package alone would still fall short.
“We calculate Elon would need another ~675mn shares pre-tax (~370mn post-tax) to reach 25%…yet the ’25 package only grants ~424mn shares pre-tax,” the analyst wrote.
He added that the gap could narrow if Musk chooses to cover his tax obligations in cash rather than shares, noting that “tax is an area where we lack clarity, and payment of taxes with cash instead of shares would result in greater ownership % increases.”
Interim Award Revoked
As the 2018 plan was reinstated, the interim 2025 award of 96 million shares — granted by the board in August as a hedge in case Musk lost his appeal — has been canceled.
Tesla confirmed the revocation in its first-quarter 10-Q filing last week, stating that the board voted to cancel the interim award on April 21.
Both Elon Musk and his brother Kimbal, a fellow Tesla director, were excluded from the vote.
In the filing, the company said that the cancellation was “consistent with the ‘no double dip’ principle, which precludes Mr. Musk from getting a windfall in the event that he may exercise the 2018 CEO Performance Award.”
The 2025 CEO Performance Award approved at the November annual meeting remains in effect.
That package can vest up to $1 trillion if Musk hits a series of milestones over the next decade, including growing Tesla‘s market capitalization to $8.5 trillion, delivering 20 million vehicles, deploying one million robotaxis in commercial service, and delivering one million Optimus humanoid robots.
Barclays on Tesla
Levy has maintained the same rating and price target on Tesla through several notes this year.
The $360 price target implies a 4.9% downside on the stock, considering Monday’s closing price of $378.67.
After reaching an all-time high of $498.83 in late 2025, Tesla has lost over 20% of its stock value in the past four months.
As of press time, the stock was trading nearly 1% lower at $375.
Earlier this month, the analyst flagged concerns about capital spending overshooting Tesla‘s guidance, writing that the stock’s weakness reflected limited visible progress on key growth drivers.
Levy warned that any indication of rising capital spending beyond the over $20 billion already announced could weigh on investor sentiment, particularly as the Terafab chip fabrication project — a joint venture between Tesla, SpaceX, and xAI — could cost trillions of dollars if fully built out.
