Is Musk's Big Payday Make-or-Break for Tesla Share Price?
The Tesla (NASDAQ: TSLA) share price has risen ahead of the company's annual shareholder meeting on Thursday, 6 November. Central to this is CEO Elon Musk's proposed pay package, potentially worth up to $1 trillion.
The Stakes of Musk's Compensation
It’s not just about the money itself, but concerns that Musk might leave if the deal isn’t approved. As Musk states, “My fundamental concern … if I go ahead and build this enormous robot army, can I just be ousted at some point in the future?“
Performance-Based Stock Package
The compensation is mainly in the form of stock, tied to ambitious performance targets. If Musk meets these within the next 10 years, Tesla’s market capitalization could soar to $8.5 trillion, over five times its current $1.5 trillion value.
Investor Opinions
- Supporters like Ark Invest CEO Cathie Wood foresee a Tesla share price of $2,600 by 2029, aligning with the market cap goal.
- Opponents include Norway’s sovereign wealth fund, owning 1.2% of Tesla, who resist the proposal.
“It’s about fears he’ll walk away if the deal isn’t approved.”
The debate centers on whether Musk’s potential to dramatically raise Tesla’s value outweighs the risks involved in granting such a vast pay package.
Author’s summary: Elon Musk’s proposed $1 trillion pay package hinges on Tesla’s stock performance, sparking debate about its impact on shareholders and the company’s future valuation.
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