Tesla Shares Decline After $1 Trillion Pay Package Approval
Tesla’s stock price dropped despite shareholders approving Elon Musk’s record $1 trillion compensation plan. Analysts suggest this shift signals investors focusing more on Tesla’s future AI and automation goals rather than immediate leadership confidence.
Stock Market Reaction
On Friday morning, Tesla’s shares fell 5.04% to $423.40 but later recovered slightly to $429.44, still representing a 3.69% decrease. This reaction seems unusual given strong shareholder support for Musk’s pay package.
Analyst Insights
Experts interpret the decline as a typical “buy the rumor, sell the news” scenario, where investors price in likely outcomes ahead of formal announcements and then sell afterward.
Shareholder Approval and Pay Package Details
At Tesla’s annual meeting, over 75% of votes backed Musk’s equity-based pay plan. Company chair Robyn Denholm noted:
“The plan, entirely structured through stock awards, could increase Musk’s ownership by 12% if Tesla meets a series of ambitious performance targets.”
To realize the full package value, Musk must:
- Raise Tesla’s market capitalization to $8.5 trillion
- Boost annual earnings 24-fold to $400 billion
- Expand Tesla’s involvement in robotics and self-driving technology
Leadership Endorsement
Robyn Denholm highlighted Musk’s exceptional achievements and reaffirmed his importance to Tesla’s future:
“His continued involvement is vital as Tesla transitions from an automaker to a broader artificial intelligence and industrial automation leader.”
Author’s summary: Despite record pay approval, Tesla shares fell as investors shift focus from CEO support toward the company’s ambitious expansion into AI and automation industries.