Tesla Shares Decline Despite Approval of Elon Musk’s $1 Trillion Pay Package
Tesla’s stock dropped on Friday morning even after shareholders overwhelmingly approved CEO Elon Musk’s unprecedented $1 trillion compensation plan. The shares initially fell 5.04% to $423.40 but later recovered slightly to $429.44, remaining down 3.69% at the time of writing.
Market Reaction and Analyst Insights
This market movement may seem unexpected given the strong shareholder backing of Musk’s leadership. Analysts suggest the decline reflects a typical “buy the rumor, sell the news” phenomenon, where investors price in anticipated results before the official announcement.
Details of Musk’s Compensation Package
At Tesla’s annual meeting, about 75% of votes favored Musk’s large equity-based pay package, according to company chair Robyn Denholm. The plan could raise Musk’s ownership stake by 12%, contingent on Tesla hitting several ambitious targets.
- Musk must increase Tesla’s market capitalization to $8.5 trillion.
- Annual earnings need to grow 24-fold, reaching $400 billion.
- Tesla must expand into new sectors like robotics and self-driving technology.
Company Chair’s Statement on Musk’s Role
Robyn Denholm praised Musk’s consistent ability to achieve the improbable and described his ongoing involvement as “vital” during Tesla’s evolution from a car manufacturer to a leader in artificial intelligence and industrial automation.
Summary: Despite shareholder approval of Musk’s landmark pay package, Tesla’s stock slipped as investors quickly shifted focus to the company’s ambitious AI and automation goals.