Tesla Shares Decline Despite Approval of Musk’s $1 Trillion Pay Package
Tesla shares fell following shareholders' approval of Elon Musk’s unprecedented $1 trillion compensation plan. Despite the overwhelming support, the stock dropped 5.04% to $423.40 before rebounding slightly to $429.44, remaining down by 3.69% at the time of reporting.
This market reaction appears contrary to the strong endorsement of Musk’s leadership but is attributed by analysts to a “buy the rumor, sell the news” phenomenon, where investors price in expected outcomes ahead of official events.
Shareholder Vote and Compensation Details
At Tesla’s annual meeting on Thursday, about 75% of the votes favored Musk’s equity-based pay package, noted company chair Robyn Denholm. The arrangement is entirely composed of stock awards and could boost Musk’s ownership by 12% if Tesla achieves several aggressive performance goals.
- Market capitalization must reach $8.5 trillion.
- Annual earnings need to increase 24-fold to $400 billion.
- Expansion into robotics and self-driving technology is required.
Leadership Importance
Robyn Denholm described Musk’s track record as “achieving the improbable” and emphasized his “vital” role as Tesla evolves from an automaker into a leading artificial intelligence and industrial automation company.
Author’s summary: Despite strong shareholder backing for Musk’s historic pay package, Tesla’s shares dipped as investors shift focus to the company’s ambitious goals in AI, automation, and robotics expansion.