What Happened?
Shares of electric vehicle pioneer Tesla (NASDAQ: TSLA) jumped 2.5% in the afternoon session after the company unveiled a new proposed compensation plan for CEO Elon Musk that could be worth up to $1 trillion.
The long-term performance award, which shareholders will vote on in November, was designed to keep Musk at the helm for the next decade. The plan ties his compensation to a series of ambitious goals, including increasing Tesla's market value to $8.5 trillion.
To receive the full payout, which would be granted in 12 tranches, the company must also hit operational targets like delivering 20 million vehicles, producing one million robotaxis, and manufacturing one million humanoid robots. The proposal would also increase Musk's voting power within the company.
Analysts viewed the move positively, with Wedbush noting the package is a "critical next step to keep Musk as CEO at least until 2030" during a key growth period.
After the initial pop the shares cooled down to $348.35, up 2.9% from previous close.
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What Is The Market Telling Us
Tesla’s shares are extremely volatile and have had 46 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 2 days ago when the stock gained 2.8% on the news that the company reported its best wholesale month of the year in China and a surge in sales in Turkey for August.
In China, the electric vehicle maker sold 83,192 vehicles, a 22.55% increase compared to July. The company also saw sales soar in Turkey, where it sold 8,730 Model Y vehicles, an 86% jump from July, making it the second-best-selling brand in the country. This strong performance in key international markets appeared to outweigh reports of an underwhelming launch in India and ongoing sales declines in some European markets.
Separately, Salesforce's CEO Marc Benioff provided positive updates on Tesla's robotics efforts after visiting the company's factory. Sharing a picture of Tesla's Optimus bot on X, he added, "Amazing what [Tesla CEO Elon Musk] is doing to create the future."
Tesla is down 8.2% since the beginning of the year, and at $348.35 per share, it is trading 27.4% below its 52-week high of $479.86 from December 2024. Investors who bought $1,000 worth of Tesla’s shares 5 years ago would now be looking at an investment worth $3,165.
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