Tesla’s $1 Trillion Musk Compensation Plan: Motivation for Expansion or Overly Generous?
- Tesla shareholders will vote on a $1T compensation package for Elon Musk, requiring $8.5T market cap and tech milestones. - Supporters argue performance-based incentives drive growth, while critics call it excessive and risk corporate governance. - Approval could trigger legal challenges, as Musk's 2018 deal was voided, and may destabilize Tesla if he leaves. - Analysts are divided, with some viewing it as necessary for leadership retention and others as unwarranted reward. - The debate highlights high-s
Shareholders of Tesla Inc. (TSLA) are scheduled to cast their votes on November 6 regarding a highly debated compensation plan for CEO Elon Musk, which could be worth as much as $1 trillion, according to
To unlock the payout,
Baker, whose firm is in favor of the plan, maintains that tying compensation to performance is vital for Tesla’s continued expansion. He wrote on X that "shareholders should generally support thoughtfully structured performance-based CEO compensation packages because they incentivize CEOs to create transformational growth and value." Tesla’s Board Chair Robyn Denholm has cautioned that Musk may depart if the package fails, which could unsettle the company.
On the other hand, prominent institutional investors such as CalPERS and the New York State Retirement Fund intend to vote against the plan. Proxy advisors Glass Lewis and Institutional Shareholder Services have also urged a no vote, calling the package excessive, while Musk has labeled these firms "corporate terrorists."
Should the compensation plan pass, it could have a major effect on Tesla’s stock, which has climbed 9% so far this year and 76% over the past year. Stocktwits data indicates that retail investors remain largely pessimistic, though message activity has leveled off. Analysts are split, with some arguing the package is crucial to keeping Musk at the helm, while others see it as an unnecessary reward given Tesla’s already lofty valuation.
In other news,
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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