Tesla shares jumped 3% on Wednesday, as a report indicated that the company’s board is exploring a new pay deal for Elon Musk.
The company’s shares gained over 4% to an intraday high of $350.
The world’s most valuable automaker’s board had appointed a special committee to consider Elon Musk’s compensation, the company had said in a SEC filing in April.
The special committee features only the company chair, Robyn Denholm, and Kathleen Wilson-Thompson, said a Financial Times report.
The report added that the committee will look to compensate Musk should the company fail to bring back his record 2018 pay deal.
The benchmark S&P 500 and Dow Jones Industrial Average both rose 0.2% in the session. The recent upmove pushed the S&P 500 into positive territory.
Legal battle for Elon Musk’s pay
Musk and Tesla were involved in a legal dispute with the Delaware Supreme Court over his 2018 pay deal, which is worth $98bn (£73.6bn) at the current stock price.
The deal includes stock options for Musk.
The compensation, which is the largest in US history, was struck down by Delaware Chancellor Kathaleen McCormick in 2024.
If the Delaware Supreme Court’s decision is appealed and changed, Musk’s ownership in the company would increase to 20% from less than 13% currently.
The world’s richest man had threatened to walk away from the company if he wasn’t granted more control over the company.
The FT report added that the committee is in the early stages of planning and hasn’t decided how to structure Musk’s new payment.
Tariff pause helps Tesla’s plans
According to a Reuters report, the company also plans to start shipping components from China for the company’s cybercab and semi-truck production after the USA and China agreed to pause tariffs.
The report adds that the company had stopped its plans for sourcing after the US government raised 145% tariffs on China, which potentially disrupted the billionaire’s plans to start mass production of the models.
Tesla is looking to start the production of these models in 2026. The company is looking to price the cybercab below $30,000.
Apart from components, China also hosts Tesla’s largest and most efficient factory, with the country contributing around 22% to the company’s revenue.
TSLA stock’s rough start to 2025
Tesla’s shares had gained recently after falling due to weak Q1 numbers.
The company’s automotive income fell 20% from the previous year, and net income plunged 70%, making it one of the worst quarters for the company in recent years.
The stock gained after the US-China tariff pause announcement and regained the $1 trillion market cap on Monday.
Tesla’s stock has rallied over 50% from $221.86 on April 8. Despite this, the shares are still down nearly 10% for the year.
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