A Peek into the Yachting World of Stock Grant Beneficiaries
Andrej Karpathy, former director of AI at the electric vehicle behemoth Tesla Inc TSLA, hinted at a scenario where a select cadre of Tesla employees might be navigating the high seas on lavish yachts, all thanks to the generous stock grants bestowed upon them, reminiscent of their counterparts at Nvidia Corp NVDA.
Unlocking the Investor Odyssey: Karpathy disclosed that within Tesla, there existed a rare breed of steadfast believers who chose to hold onto their company stock grants for over a decade, potentially sailing off into the sunset aboard luxurious vessels. However, the majority of these long-term holders seem poised to bide their time until Tesla accomplishes full autonomy through its FSD software, unlocking the prospects of fetching a premium upon sale.
Acknowledging the realities of the market, Karpathy noted the propensity of many employees to liquidate their holdings. “Most people don’t HODL…,” Karpathy replied, in response to a tweet by Openfounder co-founder JD Ross, who mused about his former roommate’s current whereabouts, having joined Nvidia after their 2013 graduation. “I wonder which yacht he lives on now,” Ross fancifully contemplated.
Navigating Growth Chart Waters: Both Nvidia and Tesla extend stock grants to their workforce. While Nvidia’s shares have surged by approximately 1879% over the past five years and an astounding 100,000% since its 1999 listing, Tesla’s stock has catapulted by an impressive 12,679% post its 2010 debut on the market. Comparatively, Tesla’s ascent is notably dwarfed by Nvidia’s exponential growth, yet it must be recognized that the former has enjoyed fewer years as a public listed entity.
The Significance Behind the Sails: Elon Musk has extolled the impact of stock grants at Tesla on multiple occasions. In a post dated March 2022, the Tesla CEO highlighted how numerous employees had ascended to millionaire status courtesy of stock grants, positing this as a contributing factor towards the absence of unionization within the company thus far.
Conversely, a December report by Bloomberg revealed that some salaried Tesla employees were not eligible for merit-based equity awards in 2023. Typically, Tesla employees are bestowed with merit-based stock grants during performance appraisals, making the absence of such awards in 2023 a notable deviation. Whether this alteration signals a long-term shift in Tesla’s compensation strategy remains uncertain, as per the report.
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