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

Tesla’s chief executive bought the stock after the company’s board proposed paying him nearly $1 trillion if he achieves certain performance goals.

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. Mr. Musk purchased about 2.57 million shares on Friday, ranging from around $372 to $397 a share.

The filing comes just days after the company’s board chair, Robyn Denholm, defended the proposed pay plan. She told The New York Times on Friday 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, to around $422, on Monday morning. Mr. Musk said on X Monday morning that the increase in Tesla’s stock over the last several years was “foretold in the prophecy.”

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.

Tesla has only a small number of autonomous taxis that operate in a limited area of Austin, Texas. They operate with technicians sitting inside who monitor the cars and can intervene if something goes wrong. The company has shown a robot but it is not clear when that device will go on sale.

“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.

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