On Friday, Sen. Bernie Sanders (I-Vt.) blasted Tesla Inc.'s (NASDAQ:TSLA) proposed $1 trillion compensation plan for CEO Elon Musk, calling it insane, while venture capitalist Chamath Palihapitiya defended the deal as a performance-based reward tied to revolutionary products.
Sanders Calls Pay Package Excessive
In a post on X, formerly Twitter, Sanders criticized Tesla's board for proposing what could become one of the largest CEO pay packages in history.
"Tesla is proposing a deal that could give Elon Musk $2 trillion in wealth, more than the bottom 59% of Americans combined. Does anybody in America think this is sane?" he wrote.
The package, unveiled in September, would grant Musk up to $900 billion in stock awards if Tesla reaches market capitalization milestones up to $8.5 trillion, according to a proxy filing.
Shareholders are set to vote on the plan at the company's annual meeting on Nov. 6.
Musk currently has a net worth of $440 billion, according to the Bloomberg Billionaire Index.
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Chamath Palihapitiya Pushes Back
Palihapitiya, a longtime Musk supporter, rejected Sanders' framing, arguing the payout must be earned through consumer adoption of Tesla products.
"Your rhetoric is so corrosive because you sneakily never use words like ';earn' or ';reward,'" he posted on X.
"For Elon to earn that kind of money, many tens of millions of people on earth will need to buy Elon's products and pay for it with their hard earned money," Palihapitiya added.
"In order for that to happen, his products will need to be revolutionary, cheap and superior on multiple dimensions. This is not obvious or straightforward."
Tesla Board Chair Denholm Defends Musk's Role
Earlier this month, Tesla board chair Robyn Denholm also defended the deal, saying it is designed to retain Musk and secure his leadership for the next stage of growth.
She said Musk's compensation is not only about money but also about maintaining influence at Tesla.
Investor Sentiment Remains Strong
Goldman Sachs analyst Mark Delaney said Musk's new performance-based award has boosted investor sentiment, noting Tesla's stock has climbed 31.54% month-to-date compared to a 4.20% gain for the S&P 500, according to Benzinga Pro.
Delaney raised his price target on Tesla from $300 to $395, citing improved consumer demand signals and delivery estimates above consensus for the third and fourth quarters.
Benzinga’s Edge Stock Rankings show that TSLA remains strong over short, medium and long-term periods, with further insights available for investors.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Image via Imagn
