Is Musk's Big Payday Make-or-Break for Tesla's Share Price?
The Tesla (NASDAQ: TSLA) share price surged ahead of the company’s annual shareholder meeting on Thursday, 6 November. The spotlight is on CEO Elon Musk’s proposed pay package, potentially worth up to $1 trillion. The significance is not merely about the sum but concerns that Musk might leave if the deal is rejected.
[translate:«My fundamental concern … if I go ahead and build this enormous robot army, can I just be ousted at some point in the future?»]
The package consists primarily of stock, which will only reach the headline figure if Musk meets challenging performance targets for Tesla over the next decade. Achieving these would push Tesla's market capitalization to $8.5 trillion—more than five-and-a-half times its current $1.5 trillion valuation.
Several shareholders believe the potential growth justifies the pay plan. Ark Invest CEO Cathie Wood supports it, having predicted a Tesla share price of $2,600 by 2029, aligning closely with the market cap goal. However, opposition exists, including from Norway’s sovereign wealth fund, which owns 1.2% of Tesla, now framed as a robotics developer.
Author's summary: Elon Musk’s $1 trillion pay package hinges on Tesla’s growth to an $8.5 trillion market cap, sparking both support and concerns over his future with the company.
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