Is Musk's Big Payday Make-or-Break for Tesla Share Price?
How much is it worth to pay Elon Musk if he can increase Tesla’s share price nearly sixfold over the next decade? The Tesla (NASDAQ: TSLA) share price rose ahead of the company’s annual shareholder meeting on Thursday, 6 November.
Musk's Proposed Pay Package
The headline topic is CEO Elon Musk’s proposed pay package, potentially worth up to $1 trillion. The issue isn't just about the payment itself but concerns that Musk might leave if shareholders reject the plan. Musk expressed his desire to maintain control:
«My fundamental concern … if I go ahead and build this enormous robot army, can I just be ousted at some point in the future?»
Stock Package Tied to Performance
The pay package mainly consists of stock options, which will only be valuable if Musk meets ambitious performance targets. If he achieves them in 10 years, Tesla’s market capitalization could jump to $8.5 trillion—over five and a half times its current value of $1.5 trillion.
Investor Opinions
- Some shareholders believe pushing Tesla’s share price that high within the timeframe justifies the package.
- Ark Invest CEO Cathie Wood supports the plan and has set a $2,600 target price for Tesla by 2029, closely matching the proposed market cap.
- Others oppose it, such as Norway’s sovereign wealth fund, which owns 1.2% of Tesla—now considered more a robotics developer than a car maker.
Author's summary: Elon Musk's ambitious pay package hinges on massive Tesla growth, dividing investors between confidence in his vision and wariness over control and valuation risks.