Tesla Stock Declines Following Approval of Musk's $1 Trillion Pay Package
Tesla shares dropped despite shareholders approving CEO Elon Musk’s unprecedented $1 trillion compensation plan, as investors shift their focus to the company's AI and automation goals.
Stock Market Reaction
On Friday morning, Tesla's stock fell by 5.04% to $423.40, but later partially recovered to $429.44, remaining down 3.69% at the time of writing. This decline contrasts with the strong shareholder vote supporting Musk’s leadership.
“The decline likely reflects a ‘buy the rumor, sell the news’ dynamic,” analysts said, describing a common investor pattern of pricing in expected outcomes before news is official.
Shareholders Approve Record Pay Package
At Tesla’s annual meeting on Thursday, approximately 75% of votes favored Musk’s massive equity-based compensation structure, according to company chair Robyn Denholm.
The pay plan consists entirely of stock awards and could increase Musk’s ownership by 12%, contingent on Tesla hitting ambitious performance targets.
Performance Targets for Full Payout
- Grow Tesla’s market value to $8.5 trillion
- Increase annual earnings 24-fold to $400 billion
- Expand Tesla’s presence into robotics and self-driving technology
Leadership Endorsement
Robyn Denholm praised Musk’s history of achieving the improbable, calling his ongoing involvement “vital” as Tesla evolves from an automaker into a leader in artificial intelligence and industrial automation.
Summary: Despite Tesla shareholders backing Musk’s historic $1 trillion pay plan, the stock dipped as investors pivot focus to Tesla’s ambitious AI and automation growth targets.
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