Tesla stock drops over 2% as investors grow cautious
Tesla shares slipped more than 2% in early trading on Thursday, as investors prepared for one of the automaker’s most significant shareholder meetings in recent years. The stock traded around $452 after closing at $462.07 on Wednesday, marking only the seventh time it had finished above $460. It remains close to its record closing high of $479.86, reached in December 2024.
Over the last three months, Tesla stock has jumped 44%, driven by renewed enthusiasm for the company’s push into artificial intelligence and robotics. Yet, ahead of the annual meeting in Austin, Texas, investors are turning cautious.
Focus on Musk’s record compensation plan
During Thursday’s meeting, shareholders will decide on key proposals that could redefine Tesla’s future direction. Central to the discussion is CEO Elon Musk’s proposed $1 trillion compensation package—the largest executive pay plan ever designed.
Musk’s proposed pay package ties compensation to a series of operational and market milestones. To receive the full payout, Tesla would need to deliver 20 million vehicles within ten years and deploy one million robotaxis, while its market capitalisation climbs from the current $1.5 trillion to between $2 trillion and $8.5 trillion.
Mixed investor sentiment
Supporters describe the goals as highly ambitious but potentially transformative if achieved, predicting massive value creation for shareholders. However, the plan has drawn criticism from several major investors, including Norway’s sovereign wealth fund and top proxy advisory firms, who consider the package excessive and disproportionate.
Author’s summary: Tesla’s falling share price reflects investor uncertainty ahead of a high-stakes vote on Elon Musk’s unprecedented $1 trillion pay deal.