Tesla shares surged 7% in premarket trading in New York on Thursday following the re-approval of CEO Elon Musk’s 2018 pay package by shareholders.
The support for the package surpassed the required threshold, as announced by Musk on Wednesday night.
Tesla shares hit $189.57 in premarket trading
As of 4:23 am ET, Tesla’s stock rose 6.95% to $189.57. The shareholder vote reaffirmed the controversial pay package, which ties Musk’s compensation to the company’s performance milestones.
This outcome has boosted investor confidence, reflected in the sharp rise in Tesla’s share price.
The 2018 pay package is notable for its performance-based structure, which grants Musk substantial stock options upon achieving specific company milestones, including market capitalization and operational targets.
The package is designed to align Musk’s interests with those of shareholders, incentivizing long-term growth and profitability.
Impact of shareholder support on Tesla’s future
The re-approval of Musk’s pay package indicates strong shareholder confidence in his leadership and Tesla’s future prospects.
This confidence is crucial as Tesla continues to expand its product lineup and scale its operations globally. The positive market reaction underscores the belief that Musk’s visionary approach will drive the company’s sustained growth and innovation.
The pay package, valued at around $2.6 billion at the time of its approval, has faced scrutiny due to its size and the ambitious nature of the targets.
However, the re-approval suggests that shareholders believe in Musk’s ability to meet these targets and deliver value to the company.
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