Tesla stock falls after Musk’s $1T pay package approval
Tesla’s stock slipped on Friday morning even after shareholders approved CEO Elon Musk’s record $1 trillion compensation plan. The market reaction puzzled many, given the strong show of confidence in Musk’s leadership and vision.
Market reaction
Shares dropped 5.04% to $423.40 before rebounding slightly to $429.44, remaining down 3.69% overall. Analysts suggest the decline follows a “buy the rumor, sell the news” trend often seen when major announcements are anticipated by investors.
Shareholder approval
At Tesla’s annual meeting on Thursday, approximately 75% of shareholders voted in favor of the massive equity-based compensation package, according to company chair Robyn Denholm.
“To unlock the full value, Musk must drive Tesla’s market capitalization to $8.5 trillion, grow annual earnings to $400 billion, and expand into new domains such as robotics and self-driving technology.”
Analyst perspective
The package could raise Musk’s stake in Tesla by 12% if performance goals are met. Analysts now believe investor attention is shifting toward Tesla’s ambitions in artificial intelligence and automation, key areas for the company’s next growth phase.
Denholm described Musk’s ongoing involvement as “vital” as Tesla evolves from a carmaker into a wider leader in AI and industrial automation.
Author’s Summary
Despite a landmark vote backing Musk’s $1T pay deal, Tesla’s shares dipped as investors recalibrated expectations toward future AI-driven growth.