Is Musk's Big Payday Make-or-Break For Tesla's Share Price?
The Tesla (NASDAQ: TSLA) share price rose ahead of the company’s annual shareholder meeting on Thursday, 6 November. The central focus is CEO Elon Musk’s proposed pay package, potentially valued up to $1 trillion.
It’s not just about the money itself but concerns that Musk might leave if the deal isn’t approved. 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?”
The pay package primarily involves stock, which only reaches such high headline values if Musk achieves ambitious performance goals over the next ten years. If he meets these targets, Tesla’s market capitalization could grow to $8.5 trillion, more than five and a half times its current $1.5 trillion valuation.
Several shareholders believe that if Musk can boost Tesla’s share price so dramatically within this timeframe, the deal is justified. Ark Invest CEO Cathie Wood supports this view, having set a $2,600 price target on Tesla by 2029—which aligns closely with the market cap forecast.
However, opposition remains from major investors like Norway’s sovereign wealth fund, which owns 1.2% of Tesla—here referred to also as a robotics developer.
Author’s summary: Elon Musk’s proposed $1 trillion pay package hinges on Tesla’s long-term performance, stirring mixed reactions from shareholders and highlighting his central role in the company’s ambitious future.