Investor Ross Gerber of the investment firm Gerber Kawasaki has warned Tesla Inc. (NASDAQ:TSLA) investors of the potential ramifications of stock-based employee compensation, drawing parallels with Meta Platforms Inc.‘s (NASDAQ:META) share buybacks.
A Real Cost
The investor took to the social media platform X on Monday, warning Tesla shareholders that stock compensation was a real cost for companies. “Tesla shareholders should pay attention to this regarding meta,” he said, then shared a quote from an article by the Wall Street Journal that said the Mark Zuckerberg-led company spent close to $23.6 billion on “share buybacks to offset dilution.”
Share buybacks can play a major role in stock valuation. Employees, when offered stock-based compensation, can affect the value of the stock as the number of shares issued increases, making existing shares less valuable.
Companies buying back shares can offset dilution concerns as it decreases the number of overall shares available on the market, leading to an increase in stock value.
Tesla’s Stock-Based Compensation, Pay Package
Tesla, according to an Electrek report from November last year, reserved close to 60 million shares as compensation for Tesla’s employees, but also reserved 208 million shares for CEO Elon Musk.
According to an SEC filing dated December 30, 2025, Musk owns over 519 million shares of the EV giant. Tesla currently has over 3.7 billion outstanding shares on the market.
Benzinga Edge Rankings show that Tesla scores well on the Momentum metric and offers a favorable price trend in the Long Term.
Price Action: TSLA slid 2.91% to $399.83 at Market close on Monday, and surged 0.19% to $400.57 during the overnight session.
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