Tesla Shares Decline Despite Pay Package Approval
Tesla’s stock dropped even after shareholders gave strong approval to CEO Elon Musk’s unprecedented $1 trillion compensation plan. On Friday morning, shares fell by 5.04% to $423.40, though they later recovered slightly to $429.44, remaining about 3.69% lower.
Market Reaction Explained
This market movement might seem unexpected given the clear endorsement of Musk’s leadership. Analysts interpret it as a “buy the rumor, sell the news” effect, where investors price in expected developments ahead of official confirmation.
Shareholders’ Vote Results
At Tesla’s annual meeting, approximately 75% of the votes favored Musk’s equity-based compensation package, company chair Robyn Denholm reported.
Details of Musk’s Pay Package
The compensation plan is structured entirely through stock awards and could boost Musk’s ownership stake by 12%, but only if Tesla hits ambitious goals. These targets include:
- Raising Tesla’s market capitalization to $8.5 trillion
- Increasing annual earnings 24-fold to $400 billion
- Expanding operations into robotics and autonomous driving
Robyn Denholm said, "Musk’s continued involvement is vital as Tesla shifts from a car manufacturer to a leader in AI and industrial automation."
She also praised Musk’s history of achieving what seemed impossible.
Summary: Despite strong shareholder support for Musk’s historic $1 trillion pay plan, Tesla’s stock fell as investors shifted focus toward the company’s future in AI and industrial automation.