Renowned TV host Jim Cramer has backed Tesla Inc. CEO Elon Musk’s trillion-dollar compensation package, urging investors to think beyond short-term numbers and recognize the company’s broader technological ambitions and societal impact.
Cramer’s Advice to Investors
Cramer said, “Don’t be small-minded,” emphasizing that investors should think beyond the short-term and grasp the sheer scale of what Tesla under Musk represents. “Tesla is about robots, full self-driving, the future,” he said, highlighting that it’s more than just an automotive company. “Give him his package.”
Musk’s Trillion-Dollar Compensation Package
Tesla’s board recently unveiled a new compensation package for its CEO that could be worth as much as $1 trillion, across 12 tranches. The 11th and 12th tranches require a market capitalization of $7.5 trillion and $8.0 trillion, respectively, compared to its current $1.41 trillion. While the board has asked investors to vote in favor of the recommendations, critics have pointed out that Musk could collect as much as $50 billion by hitting some of the easier goals that are part of the package.
Experts Split Over Pay Package
Fund manager and CEO of Ark Invest, Cathie Wood, has defended Musk’s package, pushing back against the index funds that opposed it, calling it “a form of socialism.” On the other hand, Ross Gerber of Investment firm Gerber Kawasaki has come out against the package, terming it “insanity.” Gerber questioned the company’s board, asking if they tried to “actually negotiate with Elon? I doubt it,” and warned that the Tesla board was not “independent” of Musk.
Market Reaction
Tesla shares were up 2.28% on Thursday, closing at $448.98 per share, and are down 0.58% pre-market. The stock scores high in terms of price trend in the short, medium, and long terms.
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