Austin, Texas — Tesla’s stock fell sharply on Friday, declining by over 3% and erasing $10 billion from CEO Elon Musk’s estimated wealth. This drop followed the company’s approval of a controversial compensation plan that could potentially reward Musk with up to $1 trillion over the next decade, a decision that has faced criticism from various analysts and shareholders.

As trading closed on Friday, Tesla shares were priced at approximately $429.70, marking a continued downturn after a similar decline of 3.5% on Thursday. The downturn comes in the wake of a shareholder vote that saw more than 75% of investors back the compensation package despite pushback from significant equity holders.

The approved plan grants Musk more than 423 million additional shares, elevating his stake in the company to around 25%. The compensation is contingent upon Tesla meeting extensive targets, including increasing its market capitalization to $8.5 trillion and achieving sales of 12 million vehicles over the next decade.

Critics have labeled the $1 trillion incentive as “outrageous.” Matt Britzman, a senior equity analyst at Hargreaves Lansdown, described the goals tied to Musk’s compensation as “Everest-sized,” even while acknowledging that Musk would only see financial rewards if he significantly boosts Tesla’s value.

In contrast, some analysts argue that the approval of the compensation plan could make sense for Tesla shareholders. Russ Mould, investment director at AJ Bell, noted the “logical reasons” behind the vote given the ambitious targets. Dan Ives from WedBush Securities also pointed out that most shareholders had “little to lose” by endorsing the deal, suggesting it solidifies Musk’s position during challenging times.

However, not all investors were in favor. New York City Comptroller Brad Lander, who manages Tesla shares for the city’s pension fund, criticized what he referred to as a “crony board.” Lander claimed that shareholders were now burdened with an “indefensible” compensation package and called into question the necessity of such a massive payout.

Despite the day’s stock dip, Musk remains the world’s richest individual, with a net worth estimated at around $481.4 billion. This figure marks a drop of $10 billion attributed to the plummeting stock price, following a trend that has seen other billionaires, including Larry Ellison and Jeff Bezos, experience similar losses amid shifting market conditions.

The discussions surrounding Musk’s compensation plan bring to light broader conversations about executive pay and corporate governance, leaving Tesla’s future trajectory intertwined with the ambitious aspirations of its CEO.