Investment firm Gerber Kawasaki’s co-founder, Ross Gerber, has expressed concerns that Tesla Inc. CEO Elon Musk’s trillion-dollar pay package could lead to significant dilution of the company’s share value.
$275 Million Per Day Dilution
Gerber took to social media to state that the stock dilution would be equivalent to $275 million per day if the pay package is approved. This has sparked worries among investors and analysts, who are concerned about the potential impact on the company’s stock price.
Dilution Concerns
Gerber’s concerns are shared by Norway’s sovereign wealth fund, Norges Bank Investment Management (NBIM), which holds a 1.12% stake in Tesla worth $17 billion. The fund has announced that it will vote against the pay package, citing concerns over the total size of the award, dilution, and lack of mitigation of key person risk. Proxy advisory firm Glass Lewis has also raised concerns about the potential for “significant dilution” with the pay package.
Package Receives Criticism
The pay package has received criticism from several quarters, including the California Public Employees Retirement System (CalPERS), which holds over $2.3 billion in Tesla shares. CalPERS has announced that it will vote against the pay package, citing concerns over the concentration of power. Gerber has also criticized the package, calling it “insanity.”
Pay Package Receives Support
However, the pay package has also received support from some funds, including the Florida Retirement System’s State Board of Administration (SBA), which has backed the package. Charles Schwab, an investment firm, has also announced its support for the pay package. Industry experts like ARK Invest CEO Cathie Wood have predicted that the package will win “decisively” at the shareholder meeting.
Impact on Tesla’s Stock Price
The pay package has sparked a lively debate among investors and analysts, with some predicting that it could lead to a significant decline in Tesla’s stock price. Others believe that the package will have a positive impact on the company’s performance, driving growth and innovation. As the debate continues, one thing is clear: the outcome of the pay package will have a significant impact on Tesla’s future.
Key Points to Consider
- The pay package could lead to significant dilution of Tesla’s share value
- Several investors and analysts have raised concerns over the package
- Some funds have announced their support for the package
- The outcome of the pay package will have a significant impact on Tesla’s future
What’s Next for Tesla?
As the company navigates the debate over the pay package, investors and analysts will be watching closely to see how the outcome will impact Tesla’s stock price. With the company’s future hanging in the balance, one thing is clear: the next few weeks will be crucial for Tesla and its stakeholders.