On Tuesday, shares of electric vehicle company Tesla was down more than 10 percent in mid-day trading, extending a second day after the company’s CEO announced his desire to sell 10 percent of his Tesla stock.
Last weekend, Elon Musk asked his Twitter followers to help him determine what to do with 10 percent of his Tesla stock via a poll he shared stating that “I will abide by the results of this poll, whichever way it goes”. Out of his 62.5 million followers, 3,519,252 participated in the poll. While 42 percent voted ‘No’, 58 percent voted for ‘Yes’. The Twitter poll came with the caption “Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10 percent of my Tesla stock”.
Following the poll, Tesla stock has continued to drop and is on its path to seeing its largest drop for the year. On Monday, Tesla shares were down by almost 5 percent, bringing a pause to the upward trend recorded through the year. Irrespective of this, the company’s shares are up over 47 percent this year, doubling from a year ago. The company also hit a new milestone of $1 trillion in valuation following Hertz order of 100,000 vehicles.
Current and former board members of Tesla such as Kimbal Musk, Ira Ehrenpreis, Antonio Gracias etc., have since sold off their Tesla shares last month as the company’s stock rallied.
Elon Musk received a hefty options package as part of a CEO performance plan in 2012. Because he doesn’t take a salary or cash bonus, his wealth comes from those stock awards and gains in Tesla’s share price. The 2012 award was for 22.8 million shares at a strike price of $6.24 per share. Those are due to expire on Aug. 13, 2022. He also has additional options from an unprecedented 2018 CEO pay package as well.
The public awaits an official statement from Elon Musk who tweeted last weekend that “…I do not take a cash salary or bonus from anywhere. I only have stock, thus the only way for me to pay taxes personally is to sell stock”.
The EV company’s CEO has promised at least 92 million of his Tesla shares to lenders for cash borrowing.