Tesla Inc. has reportedly told some employees that merit-based stock grants won’t be included as part of overall compensation this year.
Four salaried employees told Bloomberg News that no workers would get the stock awards that are usually given out. That was true even for top performers, they said in a report that published Wednesday.
Earlier this week, a separate report said Tesla
TSLA,
would give most hourly workers at its Nevada gigafactory raises of around 10% beginning in the new year.
Stock grants offered alongside salary packages have traditionally been a way for the electric-vehicle maker to stay competitive with its hires. The equity takes four years to vest, meaning workers need to stay reap those benefits, according to the Bloomberg report.
MarketWatch has reached out to Tesla for comment.
As part of the Magnificent Seven group of tech stocks that have been favored by investors this year, Tesla has seen its stock climb 108%, even after an earnings miss in third-quarter results and some tamping down of expectations over the Cybertruck. The return marks the best since an eye-popping 743% surge in 2020.
A year ago at this time, Musk was trying to rally employees over the weak stock performance — the stock dropped 65% in 2022 — telling them not to be too concerned about “stock craziness.”
But in the third-quarter call with analysts, Musk directly spoke to challenges he sees to the consumer. “I am worried about the high interest rate environment that we’re in. I just can’t emphasize this enough, that the vast majority of people buying a car is about the monthly payment. And as interest rates rise, the proportion of that monthly payment that is interest increases naturally.
“If interest rates remain high or if they go even higher, it’s that much harder for people to buy the car. They simply can’t afford it,” Musk said.
