Tesla Stock Drops Over 2% as Investors Brace for Key Shareholder Meeting
Tesla's stock showed volatility during early trading on Thursday, with investors preparing for one of the most significant shareholder meetings in years. The stock dropped more than 2%, trading near $452. On Wednesday, it closed at $462.07, marking just the seventh time it surpassed $460 and approaching its all-time closing high of $479.86 set in December 2024.
Over the last three months, Tesla shares surged by 44%, driven by renewed optimism about the company's AI and robotics ventures.
Annual Meeting Highlights
The annual meeting, held in Austin, Texas, will feature votes on several proposals that could dramatically impact Tesla's direction. The primary focus is CEO Elon Musk's $1 trillion compensation package, which is the largest executive pay plan ever proposed in corporate history.
Details of Musk's Compensation Package
- The package ties Musk's pay to key operational and market milestones.
- To earn the full payout, Tesla must deliver 20 million vehicles within a decade.
- Tesla must deploy 1 million robotaxis.
- Its market capitalization must grow from $1.5 trillion to between $2 trillion and $8.5 trillion.
Supporters argue these goals are highly ambitious but could create immense value for shareholders if achieved.
"The goals are extraordinarily ambitious and would generate immense shareholder value if achieved."
Nevertheless, significant opposition has emerged from major investors, including Norway’s sovereign wealth fund and leading proxy advisory firms, which have criticized the package as excessive.
"Several major investors, including Norway’s sovereign wealth fund, have labelled the package excessive."
Author's Summary
Tesla’s stock decline reflects investor uncertainty ahead of a pivotal meeting where approval of Elon Musk’s historic $1 trillion compensation plan, tied to ambitious growth targets, will be decided.