03:30 PM EDT, 06/13/2024 (MT Newswires) -- Tesla (TSLA) Chief Executive Elon Musk's claim about securing shareholder approvals for his 2018 compensation package and another key resolution is a "pop-the-champagne" moment for both him and shareholders and likely removes an overhang on the electric vehicle maker's stock, Wedbush Securities said Thursday.

Musk said in a post on X late Wednesday that Tesla shareholders were approving his proposed $56 billion pay package and a proposal to move the company's state of incorporation to Texas from Delaware "by wide margins!"

The company's shares were up 4.1% in late Thursday trading. The stock is still down by nearly 26% so far in 2024.

The company's shareholders previously approved Musk's pay package in 2018, but a Delaware judge in January voided the payout plan, calling it an "unfathomable sum."

The purported shareholder re-approval likely removes an overhang of between $20 and $25 on the EV maker's stock, Wedbush analyst Daniel Ives said in a Thursday note to clients. The brokerage expects the company to officially announce the voting results "sometime" before the annual shareholder meeting ends Thursday afternoon.

"We believe an overwhelming retail presence voting green light for both proposals was key to approval despite some large shareholders voting no," Ives said. "Based on all of our discussions over the past month, large shareholders at the end of the day knew that voting no would risk Musk potentially eventually leaving as CEO, and the risk far overweighed the reward in voting no on this proposal despite some obvious frustration with Musk."

Proxy advisory firms Glass Lewis and Institutional Shareholder Services have recommended against the compensation proposal. Earlier this year, Musk said on X he would be "uncomfortable" growing Tesla to be a leader in AI and robotics without a 25% voting control. Last week, Tesla Chair Robyn Denholm said in a letter to investors that Musk's pay package must be approved to keep him motivated.

At the Thursday meeting, Wedbush expects Musk to address keeping the company's AI initiatives "under the hood of Tesla despite some threats to the contrary," according to the note. "Now with this (compensation) package done, we would expect the board to look to get Musk to an incentive-driven 25% ownership of Tesla that should resolve this AI threat saga the last few months," Ives wrote.

Musk also needs to recommit as Tesla CEO for the next three to five years and address a sub-$30,000 vehicle, among other initiatives, the note said.

Despite Musk's claim of a likely victory in the shareholder vote, demand challenges remain for the company, Wedbush said. "This is (a) pivotal period for Tesla and Musk to navigate this turbulent period to see improved demand, (full self-driving) success, and new model rollouts over the coming year," Ives said.

Wedbush maintained its outperform rating and a $275 price target on Tesla's stock.

Price: 182.75, Change: +5.46, Percent Change: +3.08