San Francisco, CA – Shareholders of Tesla voted to reinstate Elon Musk’s controversial pay package, a move that sparked mixed reactions from investors and analysts. While some see it as a reward for Musk’s past achievements, others express skepticism about the package’s hefty value of up to $56 billion.
Early Tesla investor Ibrahim AlHusseini described the vote as a “game of chicken” where shareholders ultimately gave in to Musk’s demands. Despite concerns about Tesla’s dropping stock price and future performance, the majority of shareholders, accounting for 77%, supported Musk’s pay package.
New York City Comptroller Brad Lander, who oversees pension funds that own significant Tesla shares, criticized the approval as a “mistake.” He highlighted the potential risks of the generous compensation plan and urged for more clarity in Tesla’s growth plans under Musk’s leadership.
However, the approval of Musk’s pay package signals a vote of confidence in his leadership from some analysts. Canaccord Genuity managing director George Gianarikas commended the decision, emphasizing Musk’s crucial role in Tesla’s success and the company’s competitive edge in developing full self-driving technology.
Meanwhile, longtime Tesla bull Dan Ives from Wedbush sees the approval as a positive step towards Tesla’s growth story. He believes that removing the uncertainty around Musk’s compensation will benefit shareholders and pave the way for Tesla to achieve a valuation exceeding $1 trillion by 2025.
Despite some analysts’ optimism, others like Dave Harden from Summit Global urge caution when considering Tesla shares. Harden raised concerns about potential dilution for shareholders and emphasized the need for clearer evidence of growth before investing in Tesla.
As Tesla moves forward with reinstating Musk’s pay package, the company faces both challenges and opportunities in the competitive electric vehicle market. The decision reflects a complex balancing act between rewarding Musk’s contributions and ensuring sustainable growth for Tesla in the future.
