Tesla Stock Drops Over 2% Amid Key Shareholder Meeting
Tesla's stock fell more than 2% in early trading on Thursday, dropping to about $452, as investors prepared for one of the most important shareholder meetings in recent years. The stock had closed at $462.07 the previous day, marking only the seventh occasion it finished above $460 and near its all-time closing high of $479.86 set in December 2024.
Recent Stock Performance
Over the last three months, Tesla’s shares have gained 44%, driven by renewed confidence in the company’s artificial intelligence and robotics projects.
Annual Meeting in Austin
During Thursday’s annual meeting in Austin, Texas, shareholders are set to vote on several critical proposals impacting Tesla’s trajectory. The most notable is the approval of CEO Elon Musk’s $1 trillion compensation plan, the largest of its kind in corporate history.
Details of Musk’s Compensation Package
The package links Musk’s compensation to ambitious operational goals and market benchmarks. Full compensation requires Tesla to deliver 20 million vehicles over ten years, deploy one million robotaxis, and see its market capitalization increase from $1.5 trillion to between $2 trillion and $8.5 trillion.
Support and Opposition
Proponents believe these targets are highly ambitious and could yield tremendous value for shareholders if met. However, the proposal faces opposition from some major investors, including Norway’s sovereign wealth fund and well-known proxy advisory firms, who consider the package excessive.
"Musk’s proposed pay package ties compensation to a series of operational and market milestones."
"The proposal has met resistance from several major investors, including Norway’s sovereign wealth fund and prominent proxy advisory firms, which have labelled the package excessive."
Author's summary: Tesla’s stock decline reflects investor caution ahead of a pivotal meeting where a historic $1 trillion CEO pay plan tied to bold growth targets faces both strong support and significant opposition.
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