Tesla boss makes rare billion-dollar purchase as electric car maker proposes unprecedented compensation package amid Pope’s criticism of executive wealth
Tesla chief executive Elon Musk has snapped up approximately $1 billion (£740 million) worth of shares in the electric vehicle manufacturer, marking his most significant stock purchase in the company since 2020 and sending shares soaring in early trading on Monday.
The billionaire tycoon acquired 2.57 million shares at prices ranging between $371 and $396 on Friday, according to regulatory filings released early Monday morning. The purchase represents Musk’s first open-market acquisition of Tesla stock in more than five years, with his previous buy being approximately 200,000 shares worth $10 million in February 2020.
Tesla shares jumped 8.8 per cent in pre-market trading as investors interpreted the rare insider purchase as a strong vote of confidence in the company’s future. The stock had been trading slightly lower for 2025 before Monday’s surge, despite gaining more than 25 per cent over the past three months.
The timing of Musk’s billion-dollar investment coincides with Tesla board chair Robyn Denholm mounting a vigorous defence of the company’s proposed new compensation package for the chief executive, which could be worth up to $1 trillion (£740 billion) if ambitious targets are met over the next decade.
“He is a generational leader,” Denholm said in an exclusive Bloomberg Television interview on Friday. “There aren’t any other people out there like Elon who can actually lead the company over the next decade or so.”
The Australian executive, who has served as Tesla’s chair since November 2018, stressed that the unprecedented pay package would only deliver rewards if Musk achieves extraordinary growth targets, including raising Tesla’s market capitalisation to $8.5 trillion, roughly eight times its current value and twice the highest valuation any company has ever achieved.
Pope Enters Executive Pay Debate
The astronomical compensation proposal has drawn sharp criticism from unexpected quarters, with Pope Leo XIV weighing in on corporate excess in his first media interview since ascending to the papacy in May.
“CEOs that 60 years ago might have been making four to six times more than what the workers are receiving… it’s 600 times more now,” the pontiff told Catholic news website Crux in excerpts released on Sunday.
The Pope specifically referenced Musk’s potential to become the world’s first trillionaire, asking: “What does that mean and what’s that about? If that is the only thing that has value anymore, then we’re in big trouble.”
The religious leader’s comments add moral weight to growing scrutiny of executive compensation packages at a time when income inequality has become a flashpoint in global politics.
Wealth Rankings Shift
The stock purchase comes as Musk has reclaimed his position as the world’s richest person, with a fortune estimated at $385 billion (£285 billion), according to Bloomberg’s Billionaires Index. He briefly lost the top spot last week to Oracle co-founder Larry Ellison, whose net worth soared to $393 billion following a spectacular surge in Oracle shares after the software giant reported blowout earnings driven by artificial intelligence demand.
Ellison’s wealth jumped by a record $89 billion in a single day on Wednesday after Oracle announced it had signed four multibillion-dollar contracts and projected cloud infrastructure revenue would leap from $10 billion to $144 billion by fiscal 2030. However, Musk’s fortune has since edged ahead again as Tesla shares recovered.
Political Ventures and Business Focus
The billion-dollar share purchase also signals Musk’s renewed commitment to Tesla following his controversial stint in President Donald Trump’s administration. The tech mogul departed his role at the Department of Government Efficiency (DOGE) at the end of May after approximately 130 days as a special government employee.
As my scheduled time as a Special Government Employee comes to an end, I would like to thank President Trump for the opportunity to reduce wasteful spending,” Musk posted on his social media platform X in late May.
His involvement with DOGE had sparked a consumer backlash against Tesla, with some owners selling their vehicles and reports of vandalism at Tesla showrooms. The company’s shares fell more than 14 per cent earlier this year as Musk’s political activities appeared to damage the brand.
Industry analyst Dan Ives of Wedbush Securities called Monday’s purchase “a huge sign of confidence for Tesla bulls and shows Musk is doubling down on his Tesla AI bet.”
Ambitious Future Plans
Under the proposed compensation package, which shareholders will vote on in November, Musk would receive 423.7 million additional shares if Tesla meets specific market value and performance milestones. The plan requires the company to achieve a series of ambitious goals, with the ultimate target being an $8.5 trillion market capitalisation.
“It’s a zero plan if he doesn’t achieve the goals,” Denholm emphasised, noting that each tranche of shares would only vest when both operational and market capitalisation targets are met.
The compensation proposal comes after Musk’s previous 2018 pay package, valued at more than $50 billion, was struck down twice by a Delaware judge as excessive and unfair to shareholders. Tesla continues to appeal that decision.
Diversified Empire
Musk’s business interests extend far beyond Tesla. He owns approximately 42 per cent of rocket company SpaceX, which is reportedly planning an insider share sale that would value the company at $400 billion (£296 billion). He also holds a majority stake in artificial intelligence startup xAI, recently valued at $200 billion (£148 billion), making his private company wealth now exceed his Tesla holdings.
The tech mogul also owns social media platform X (formerly Twitter), which he purchased for $44 billion in 2022, and runs several other ventures including Neuralink, which develops brain-computer interfaces, tunnelling company The Boring Company, and robotics initiatives.
Tesla’s board has proposed that the company consider taking a stake in xAI, which already provides its Grok chatbot for integration into Tesla vehicles and has agreements to purchase Tesla’s Megapack energy storage systems.
Robot and AI Focus
Musk has increasingly bet Tesla’s future on artificial intelligence, robotics and autonomous driving technology. Earlier this month, he claimed that Optimus, Tesla’s humanoid robot, could ultimately account for 80 per cent of the company’s value.
“We’re taking real-world application of AI and putting it into physical products,” Denholm explained, distinguishing Tesla’s approach from other AI companies focused on large language models.
The company is simultaneously developing its robotaxi business, though both the humanoid robots and autonomous taxi services remain years away from generating significant revenue.
Morgan Stanley analyst Adam Jonas, one of Wall Street’s most bullish Tesla observers, described the trillion-dollar compensation package as a “good deal” for investors, arguing it aligns Musk’s interests with shareholders despite the eye-watering headline figure.
However, critics including analyst Gordon Johnson argue that Tesla’s valuation has become disconnected from reality. Elon Musk has been saying since 2014 ‘we will have a fully autonomous car next year.’ It hasn’t happened, but that promise has been valued in the billions by Wall Street,” Johnson said.
As Tesla faces fierce competition from Chinese electric vehicle manufacturers and slowing demand in key markets, Musk’s billion-dollar vote of confidence and the board’s unwavering support suggest the company is doubling down on its ambitious vision for the future, even as critics question whether such astronomical executive compensation can be justified in an era of growing wealth inequality.
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Image Credit:
Elon Musk poses with cadets at the U.S. Air Force Academy (April 7, 2022) — photo by Justin R. Pacheco / U.S. Air Force, public domain
