Tesla Stock Jumps Over 7% in Pre-Trading As Elon Musk Buys $1 Bn in Shares Ahead of $1 Trillion Pay Plan Vote

Tesla Chief Executive Officer (CEO) Elon Musk has made a significant move by acquiring more than 2.5 million shares of Tesla-worth roughly $1 billion-through an indirect trust on September 12, according to regulatory filings as per AP report. This purchase was made indirectly through a trust on September 12. Following this news, Tesla's stock surged by up to 7.3% before regular trading began, potentially reversing its year-to-date decline.

Elon Musk Buys $1 Billion Worth of Tesla Shares: Tesla Stock Jumps Over 7% Pre-Market

This purchase comes at a critical juncture, coinciding with Tesla's announcement of a massive stock‑based compensation plan for Musk that is set to be voted on at the annual shareholders' meeting on November 6. The news caused Tesla's stock to jump over 7% in pre‑market trading, potentially reversing some of the losses the company has accumulated so far this year.

Tesla shares surged over 7% on Friday, building on strong momentum from the previous session. Despite being down around 2% year-to-date, the stock is now poised for its third consecutive day of gains if pre-market trends hold.

What Does the Proposed Compensation Plan Entail?

The compensation plan would grant Musk up to 12% of Tesla's outstanding shares, distributed in 12 tranches, contingent upon achieving ambitious performance goals. To unlock the first tranche (equal to 1% of the company), Musk would need to drive Tesla's valuation to $2 trillion, in addition to meeting other operational and financial targets.

For Musk to collect the entire award, Tesla may need to attain a staggering valuation of around $8.5 trillion-more than double the market cap of Nvidia, currently one of the world's most valuable tech companies.

The targets include large increases in vehicle production, operating profit, expansion into AI/robotics (robotaxis, bots) and other transformative growth metrics. Notably, this proposed compensation is not cash‑based but entirely in Tesla shares. Musk would receive nothing unless these performance benchmarks are met.

Elon Musk's $1 Trillion Tesla Pay Plan Up for Shareholder Vote in November 2025

Shareholders will vote on this proposal during the annual meeting in November 2025. Observers note that even though a 25‑basis point rate cut from the Federal Reserve is largely priced in, the compensation plan and Musk's recent share buy could shift investor sentiment. If approved, this could mark Musk as possibly the first "trillion‑dollar executive" in terms of compensation opportunity, assuming all targets are met.