Tesla Stock Declines Despite Approval of Elon Musk’s $1 Trillion Pay Package
Tesla shares fell on Friday morning after shareholders approved CEO Elon Musk’s record-breaking $1 trillion compensation package. The stock dropped 5.04% to $423.40 but later recovered slightly to $429.44, still down 3.69% at the time of writing.
Market Reaction and Analyst Insights
The decline may appear surprising given the strong shareholder support for Musk’s leadership. Analysts suggest this is a “buy the rumor, sell the news” reaction, where investors had already factored in the expected outcomes before the official approval.
Shareholder Vote Details
At Tesla’s annual meeting, approximately 75% of votes were cast in favor of Musk’s pay package, according to Tesla chair Robyn Denholm.
Compensation Plan Structure and Targets
- The package is entirely equity-based and could increase Musk’s ownership by 12%.
- Unlocking the full value requires ambitious performance goals:
- Tesla’s market capitalization to reach $8.5 trillion.
- Annual earnings to rise 24-fold, hitting $400 billion.
- Expansion into robotics and self-driving technology sectors.
Robyn Denholm’s Statement on Musk’s Role
"Musk’s continued involvement is vital as Tesla shifts from an automaker to a broader artificial intelligence and industrial automation leader."
Denholm also commended Musk’s proven ability to achieve the improbable.
Summary: Despite backing a historic pay deal, Tesla shares dipped as investors shift focus to the company's future in AI and automation.