01:07 PM EST, 11/07/2025 (MT Newswires) -- Tesla (TSLA) shares were falling Friday, a day after shareholders approved Chief Executive Elon Musk's roughly $1 trillion compensation plan, with Wedbush Securities saying the company needs to pass "significant hurdles" to unlock the pay package.

More than 75% of the electric vehicle maker's shareholders voted in favor of the proposed compensation package for Musk at a Thursday meeting, Wedbush said in a client note.

Tesla shares were down 4.6% in Friday afternoon trade. The stock has gained 5.5% so far this year.

The company's board proposed a new compensation package for Musk in September that included a potential award of about 423.7 million Tesla shares, to be granted in 12 tranches. To receive the full package, Musk will have to meet several targets, including driving the company's market capitalization to at least $8.5 trillion by 2035.

Tesla needs to cross "significant hurdles" to unlock the pay package, Wedbush analysts, including Daniel Ives, said. These include 20 million vehicle deliveries, 10 million active Full Self-Driving, or FSD, subscriptions, 1 million Optimus robot deliveries and 1 million Robotaxis in commercial operation.

"The company must also scale its operations at a profitable rate, with Musk & Co. still needing to hit $50 billion in adjusted EBITDA as its first profit target while leading to $400 billion of adjusted EBITDA over four consecutive quarters despite significant investments into (research and development) required to ramp its robotics/(artificial intelligence) strategy as the company needs to find a balance between investing aggressively into growth and margin expansion," the analysts wrote.

Earlier this week, Tesla shareholder Norges Bank Investment Management said it would vote against Musk's proposed compensation package. In October, proxy advisers Glass Lewis and Institutional Shareholder Services urged the EV maker's shareholders to reject the package.

Tesla Chair Robyn Denholm had called on shareholders to vote in favor of the pay plan, or risk losing Musk from the company.

"With this pay package now voted positively keeping Tesla's biggest asset, Musk, as its leader for the foreseeable future, we continue to believe that the AI valuation is getting unlocked, and we believe the march to an AI-driven valuation for (Tesla) over the next 6-9 months has now begun, in our view, with FSD and autonomous penetration of Tesla's installed base and the acceleration of Cybercab and Optimus in the US," the Wedbush analysts said Thursday.

Tesla's Robotaxi service will roll out in Miami, Dallas, Phoenix and Las Vegas, while removing safety riders in Austin by the end of 2025, according to the note.

Wedbush maintained its outperform rating on the Tesla stock, with a $600 price target.

Price: 424.41, Change: -21.50, Percent Change: -4.82