Tesla Stock Slips. What’s Overshadowing Musk’s New Pay Package.

Tesla CEO Elon Musk. (Apu Gomes/Getty Images)

Tesla stock was sliding on Tuesday, giving up some of the gains it made the previous session thanks to CEO Elon Musk’s new multibillion-dollar pay package.

Shares of the electric-vehicle maker slid 0.6% to $307.44 in early trading, having gained 2.2% on Monday. The S&P 500 was 0.2% higher on Tuesday.

Tesla gained some momentum after the company said in a filing on Monday that its board had approved a stock award for Musk that it tentatively valued at $23.7 billion. It said that it hoped the award would “incentivize Elon to remain at Tesla and focus his unmatched leadership abilities on further creating shareholder value.”

It isn’t surprising that the pay package had investors feeling a little more bullish. Keeping Musk around would eliminate what analysts call a key man risk, referring to the potential negative impact that the exit of a particularly influential executive would have on a company.

“We believe this grant will now keep Musk as CEO of Tesla at least until 2030 and removes an overhang on the stock,” wrote Wedbush analyst Daniel Ives in a research note. “Musk remains Tesla’s big asset and this comp issue has been a constant concern of shareholders.”

Ives maintained an Outperform rating on Tesla stock with a $500 target price.

Still, shareholders could do with some more good news. Tesla stock is down 23% this year, plummeting amid worries about weak sales numbers, as well as concerns about distraction arising from Musk’s own political activities.

One factor dragging on the stock on Tuesday could be fresh data out of Europe showing that Tesla sales had plummeted there. Deliveries fell 55% from a year ago in Germany and 60% from a year ago in the U.K., according to trade bodies.

Write to George Glover at george.glover@dowjones.com