According to a regulatory filing, CEO Elon Musk purchased roughly $1 billion worth of Tesla stock, which caused the share price to rise 6 per cent on Monday.
According to the Securities and Exchange Commission filing, the billionaire, who owns the space company SpaceX and the social media platform X, purchased 2.57 million shares on Friday at prices ranging from $371 to $396.
This increased his ownership by 0.62 per cent, making it his largest by value and his first open-market purchase since February 2020.
$1 trillion compensation package for Elon Musk
The acquisition was made in the same month that Tesla revealed a compensation package that, if Musk fulfils his vision for stratospheric growth from new technologies, could exceed $1 trillion.
Robyn Denholm, Tesla’s chair and a close friend of Musk, has recently appeared in business media to defend the compensation package.
“He is a generational leader,” Denholm said Friday on Bloomberg TV. “There aren’t any other people out there like Elon who can actually lead the company over the next decade or so.”
Musk, currently the wealthiest person in the world, could receive up to 12 per cent more company shares under the plan.
According to a filing announcing a shareholder vote on the proposal in November, Tesla must reach a market capitalisation of “at least $8.5 trillion by 2035” to receive the full award.
A Delaware court decision that invalidated a 2018 package for Musk valued at roughly $55.8 billion is currently being contested by Tesla.
Tesla’s $1 trillion market capitalisation
Following recent poor earnings, Tesla’s market capitalisation has decreased from its peak, now at just over $1 trillion.
With Tesla’s improvements in autonomous driving and robotaxi services after a proposed $1 trillion compensation package for Musk, the disclosure caused the company’s stock to rise 8 per cent during premarket trading on Monday, pushing shares toward $428 and wiping out year-to-date losses.
Musk’s support of far-right politicians and causes has drawn criticism and caused sales to plummet significantly in markets, which analysts mainly blamed on these declines.