According to regulatory filings, Tesla Motors (TSLA.US) CEO Elon Musk has purchased approximately $1 billion worth of company shares. As of press time, Tesla Motors stock surged 7.3% in Monday's pre-market trading, positioning the stock to potentially erase its year-to-date losses.
The filing reveals that Musk indirectly acquired the shares on September 12 through a trust entity. These purchases align with comments made by Tesla Motors Chairman Robyn Denholm in a recent interview, where she discussed the merits of Musk's compensation proposal, which could be worth up to $1 trillion if Tesla Motors achieves a series of ambitious market capitalization and performance targets.
Previously, Musk's proposed trillion-dollar compensation package did not strike the Tesla Motors board as "excessive" or "risky," but instead received unanimous support. The board believes that only Musk can lead the company through its next phase of disruptive transformation, making this substantial compensation both reasonable and justified.
The Tesla Motors board approved this unprecedented compensation plan to retain his services. If Musk can guide Tesla Motors to achieve a series of ambitious objectives while maintaining focused attention on company affairs, shareholders will vote in November 2025 on whether to grant him an additional 423 million Tesla Motors shares, representing approximately 12% of the current outstanding shares. This would increase Musk's voting power from the current 13% to approximately 25%.
To earn this massive reward, Musk must accomplish multiple operational targets: Tesla Motors' market capitalization must reach and maintain $2 trillion (currently valued at $1.3 trillion, requiring an additional $700 billion). Subsequently, each additional $500 billion in market cap would unlock another bonus payment, until the market cap reaches $8.5 trillion, with all 12 bonus payments fully unlocked.
Additionally, the company must deliver 20 million vehicles, achieve 20 million active Full Self-Driving subscribers, deliver 1 million Optimus robots, deploy 1 million autonomous robotaxis for commercial use, while meeting EBITDA targets. Musk must also remain with the company or commit his full attention in some other capacity for the next 7.5 to 10 years.
During compensation negotiations, Musk promised the board he would gradually reduce his political activities and discussed succession planning. Denholm stated: "Tesla Motors is prepared for leadership succession," with Musk having engaged in succession discussions with the board.
These statements have boosted investor confidence, driving Tesla Motors stock to an 8-month high of $396.69, with Friday's closing session showing a 7.36% gain.
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