Tesla ETF Spikes as Elon Musk Inches Closer to Payday

Tesla ETF Spikes as Elon Musk Inches Closer to Payday

Elon Musk said that two key shareholder resolutions were close to being decided in his favor.

Senior ETF Analyst
Reviewed by: etf.com Staff
Edited by: James Rubin

Tesla ETFs rose but were off their highs on Thursday after Elon Musk suggested that a key shareholder vote was set to be decided in his favor.

Investors were leaning toward a move of "Tesla’s state of incorporation from Delaware to Texas” and “ratifying Elon Musk’s compensation under the CEO pay package that stockholders previously approved at the 2018 special meeting,” according to a post made by Musk on the social media platform X.

Tesla shares were up by 4% about midday Thursday after rising by as much as 7.8%. 

The Direxion Daily TSLA Bull 2x Shares (TSLL) was recently up 7.5% after gaining 15.4% at the high of the day.

The news that most investors backed Musk’s $56 billion pay package was viewed positively by those that want him to stay at the helm of the company. 

Musk has threatened to leave Tesla if he doesn’t have substantial voting control of the company.

“I am uncomfortable growing Tesla to be a leader in AI & robotics without having ~25% voting control. Enough to be influential, but not so much that I can’t be overturned. Unless that is the case, I would prefer to build products outside of Tesla,” he wrote on X in January.

Seeking Voting Control

If the shareholder resolution that ratifies his 2018 pay package is approved, Musk will be one step closer to having the voting control that he wants.

However, ratification doesn’t guarantee that he will receive the 303 million stock options that he and his supporters believe he earned. 

In January, a Delaware judge struck down the pay package because it was deemed unfair and wasn’t negotiated properly by Musk and Tesla’s board of directors. 

Musk must now overturn that decision on appeal. The shareholder resolution ratifying the pay package will help him make his case but doesn’t guarantee victory.

Sumit Roy is the senior ETF analyst for etf.com, where he has worked for 13 years. He creates a variety of content for the platform, including news articles, analysis pieces, videos and podcasts.

Before joining etf.com, Sumit was the managing editor and commodities analyst for Hard Assets Investor. In those roles, he was responsible for most of the operations of HAI, a website dedicated to education about commodities investing.

Though he still closely follows the commodities beat, Sumit covers a much broader assortment of topics for etf.com, with a particular focus on stock and bond exchange-traded funds.

He is the host of etf.com’s Talk ETFs, a popular video series that features weekly interviews with thought leaders in the ETF industry. Sumit is also co-host of Exchange Traded Fridays, etf.com’s weekly podcast series.

He lives in the San Francisco Bay Area, where he enjoys climbing the city’s steep hills, playing chess and snowboarding in Lake Tahoe.