Is Musk's Big Payday Make-or-Break for Tesla's Share Price?
The Tesla (NASDAQ: TSLA) share price has risen ahead of the annual shareholder meeting on Thursday, 6 November. The main agenda is CEO Elon Musk’s proposed pay package, potentially worth up to $1 trillion. This package is not just about the money but concerns about Musk’s future with the company 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 proposal is primarily stock-based, with the full value dependent on Musk meeting ambitious performance targets for Tesla over the next 10 years. If successful, Tesla's market capitalization could grow to $8.5 trillion, more than five times its current $1.5 trillion value.
Many shareholders believe the potential growth justifies the payout. Ark Invest CEO Cathie Wood supports the plan, having set a $2,600 price target for Tesla by 2029, aligning closely with the expected market cap. However, some major investors, such as Norway’s sovereign wealth fund holding 1.2% of Tesla, oppose the proposal.
The deal’s approval is crucial for Musk to maintain control and continue driving Tesla's ambitious growth.
Author’s summary: Elon Musk's proposed $1 trillion pay package hinges on extraordinary Tesla growth targets, sparking mixed reactions amid fears he might leave without it.
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