Tesla, Inc. (NASDAQ:TSLA) shares diverged from broader market gains on Monday, ending lower for the session. Fund manager and Tesla investor Gary Black tried to ease concerns about shareholders potentially rejecting the proposal to ratify CEO Elon Musk‘s compensation plan.
What Happened: Addressing Tesla bulls worried about a possible shareholder rebuff and Musk leaving the company, Black said, “This is insane fear-mongering at its worst.” He expects shareholders to overwhelmingly approve the pay plan in 2024, as 73% did in 2018.
In 2018, shareholders vetted the proposal before Tesla created eight times more value for its shareholders between 2018 and 2024, compared to the mere 1.6 times increase in the value of the Nasdaq 100 Index, he noted. “Just pay the man what is due him,” Black urged.
See Also: Everything You Need to Know About Tesla Stock
Why It’s Important: Black’s Future Fund Active ETF (NYSE:FFND) holds about 1,842 Tesla shares, giving the stock a portfolio weighting of 2.77%. This is significantly lower than the 5%+ weighting Tesla had before March.
Black has voiced his dissent whenever he disagrees with management’s strategic direction and actions. He believes a sub-$30,000 electric vehicle is the solution to the company’s current demand problem, although management emphasizes full self-driving technology and robotaxis. He has also advocated for advertising the benefits of EV adoption to boost demand.
Tesla’s plan to seek approval for Musk’s 2018 compensation plan, after it was annulled by a Delaware Chancery Court, has met with mixed reactions. While legal experts warn that reapproval would mean payment for past work, Tesla fans have backed it, fearing Musk might follow through on his threats to leave.
In January, Musk warned that if he wasn’t vested with 25% voting rights in Tesla, he would prefer building elsewhere.
Price Action: Tesla ended Monday’s session down 1.41% at $174.95, according to Benzinga Pro data. The stock has lost about 30% year-to-date.
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