Is Musk's Big Payday Make-or-Break for Tesla's Share Price?
The Tesla (NASDAQ: TSLA) share price has surged ahead of the company’s annual shareholder meeting on Thursday, 6 November. The main agenda is CEO Elon Musk’s proposed compensation package, which could be worth up to $1 trillion.
The concern is not just about the potential payout but fears that Musk might leave if the deal is rejected. Musk expressed his desire for control:
“My fundamental concern … if I go ahead and build this enormous robot army, can I just be ousted at some point in the future?”
This package is mostly a stock award, contingent on Musk achieving ambitious performance targets for Tesla within the next ten years. Success would see Tesla’s market capitalization rise to $8.5 trillion, more than five and a half times its current $1.5 trillion valuation.
Investor Reactions
- Some shareholders are optimistic that Musk can drive the share price to these heights within the timeframe.
- Ark Invest CEO Cathie Wood supports the package, having set a $2,600 target price for Tesla by 2029, aligning with the $8.5 trillion market cap goal.
- However, other major investors oppose the proposal, including Norway’s sovereign wealth fund, which owns 1.2% of Tesla.
Notably, Tesla is now seen as more than just a car maker, evolving into a robotics developer.
Author’s summary: Elon Musk’s $1 trillion compensation hinges on Tesla’s massive growth goals, dividing investors over whether these ambitious targets justify the payout.
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