Tesla Bull Ross Gerber warning on employee compensation in Elon Musk's company: Tesla shareholders should pay attention to ...

Tesla bull Ross Gerber has warned the company’s investors to closely watch how employee stock compensation could affect the company’s share value. Gerber, who runs investment firm Gerber Kawasaki, raised concerns about the impact of issuing large amounts of stock to employees and executives.

In a post on social media platform X, he said shareholders should pay attention to how stock-based pay can dilute existing shares. Gerber made the comments while pointing to similar issues faced by other big tech companies, saying the costs are often underestimated by investors.“Stock compensation is a real cost. Tesla shareholders should pay attention to this regarding meta. ‘Meta spent an estimated $23.6 billion on share buybacks to offset dilution’,” he wrote on X, quoting a Wall Street Journal (WSJ) report.

Ross Gerber’s concerns over stock-based pay at Tesla

Ross Gerber said stock compensation is a real cost for companies because it increases the total number of shares in the market, which can reduce the value of existing holdings. He compared the situation to Meta Platforms, citing a Wall Street Journal report that said Meta spent nearly $23.6 billion on share buybacks to offset dilution caused by employee stock awards.At Tesla, stock-based compensation has drawn attention in recent years.

Reports have said the company has set aside close to 60 million shares for employee pay. In addition, a much larger number of shares have been reserved for CEO Elon Musk as part of a performance-based pay package.According to regulatory filings, Elon Musk owns more than 519 million Tesla shares, while the company has over 3.7 billion shares outstanding. His pay package is linked to ambitious targets, including vehicle deliveries, self-driving subscriptions and the rollout of Optimus robots and robotaxis.