The proposed nearly $1 trillion pay package for CEO Elon Musk is likely to be approved by Tesla Inc. shareholders at the upcoming November 6 meeting, according to experts. This package is considered one of the largest compensation plans in corporate America.
Near Zero Chance of Rejection
Gary Black, managing partner at The Future Fund, believes there is a “near-zero chance” that Tesla shareholders will vote down Elon Musk’s new proposed compensation plan. This sentiment is shared by Wedbush analyst Dan Ives, who humorously stated that he has a better chance of starting for the New York Yankees than this compensation package getting voted down.
Proposal Details
The proposal ties Musk’s payout to a series of aggressive targets that the company must achieve under his leadership over the next decade. If the company’s market capitalization touches $8 trillion, a 463% increase from its current market capitalization, Musk stands to receive stock awards worth over $900 billion.
Support from Investors
Investor and long-time Tesla bull, Tom Nash, has come out in support of Musk’s compensation package. Nash urges investors to approve the plan, stating that if Tesla shareholders want Elon to stay focused on Tesla’s future, they need to approve this plan. He emphasizes that investors should either “Approve the Trillion” or “lose the vision,” underscoring Musk’s importance to the company.
Criticism of the Pay Package
Not all investors are in support of the pay package. Investor Ross Gerber, a former Tesla bull, has questioned the company’s pay package for its famed CEO, calling it “insanity.” Gerber warns that this could open the door to more “litigation” against the company if it passes. He also questions whether anyone on the Tesla board negotiated with Musk, stating that he doubts it and believes the Tesla board is still not independent from Elon.
Market Performance
Tesla shares were up 4.31% on Monday, trading at $452.42, and are down 0.29% in pre-market. The stock scores high on momentum and quality, with a favorable price trend in the short, medium, and long terms.
Conclusion
The approval of Musk’s $1 trillion pay deal is likely, with many experts and investors believing it is necessary to keep Musk focused on Tesla’s future. However, some critics argue that the package is excessive and could lead to litigation. The final decision will be made at the November 6 shareholders’ meeting.
Related News
- Elon Musk’s Trillion-Dollar Pay Plan Receives Support From Florida Fund Holding $1 Billion In Tesla Stock
- Elon Musk’s Politics Cost Tesla Over 1 Million In Car Sales In US, Boosted Rivals’ Sales By 22%: Study