Tesla Stock Declines Despite $1 Trillion Pay Package Approval
Tesla shares dropped even after shareholders approved Elon Musk’s unprecedented $1 trillion compensation plan. On Friday morning, the stock fell 5.04% to $423.40 but later rebounded slightly to $429.44, still down by 3.69% at the time of writing.
Investor Reaction Explained
Though the vote expressed strong confidence in Musk’s leadership, analysts suggest the stock dip reflects a “buy the rumor, sell the news” pattern, where investors have already factored in the anticipated approval of the package.
Details of Musk’s Pay Package
At Tesla’s annual meeting, approximately 75% of voters supported Musk’s huge equity-based compensation, according to company chair Robyn Denholm. The plan could boost Musk’s ownership by 12% if Tesla meets challenging performance goals.
- Musk must increase Tesla’s market cap to $8.5 trillion.
- Annual earnings must grow 24 times to $400 billion.
- Expansion into robotics and self-driving technology is required.
Chair’s Comments on Musk’s Role
“Musk’s track record of achieving the improbable makes his continued involvement vital,” said Robyn Denholm, highlighting Tesla’s shift from a car manufacturer to a leader in AI and industrial automation.
Summary: Despite shareholder approval of Musk’s massive $1 trillion pay deal, Tesla’s stock fell as investors shifted focus to the company’s ambitious AI and automation goals.