Elon Musk Buys $1 Billion in Tesla Stock as Board Defends His Pay

Business|Elon Musk Buys $1 Billion in Tesla Stock as Board Defends His Pay

Elon Musk has bought around $1 billion worth of Tesla stock, his first such purchase in more than five years, as the company’s board promoted a new compensation plan that could grant him nearly $1 trillion if he meets certain performance targets.

The acquisition, made through a revocable trust on Sept. 12, was disclosed in regulatory filling on Monday, just a couple of days after the company’s board chair, Robyn Denholm, defended the proposed pay plan. She told The New York Times that Mr. Musk could achieve world-changing technology if motivated by seemingly impossible goals.

The purchase appeared to please investors. Tesla’s stock rose more than 6 percent in early trading on Monday.

Tesla, which makes electric vehicles and battery storage systems, has struggled in recent quarters. Sales of its cars have been falling around the world and will likely take another dive in the last three months of the year after a tax credit for E.V. purchases in the United States expires at the end of September.

Mr. Musk sold more than $20 billion of the company’s stock in 2022 when he acquired Twitter, now known as X.

Despite those challenges, Ms. Denholm maintains that Mr. Musk’s performance-based compensation is justified. To unlock the full payout, Mr. Musk must drive up Tesla’s valuation to $8.5 trillion, from about $1 trillion today; deploy one million autonomous taxis and one million robots, and increasing its profits more than 24-fold from last year.

“The plan is about the future of the company and Elon’s role in that in terms of leading the company to produce fabulous products and deliver for shareholders,” Ms. Denholm said. She also said that Mr. Musk is primarily interested in increasing his voting influence at Tesla, not the monetary value of shares.

But some investors have pushed back on the compensation proposal, saying that it rewards a chief executive for staying at a company that he has managed poorly.