Shares in Tesla jumped in premarket trading Monday after Elon Musk disclosed his first purchase of the stock in the open market since February 2020.

Tesla’s chief executive purchased more than 2.5 million shares in the company Friday, totalling around $1 billion, according to a regulatory filing released Monday.

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The move signals Musk’s commitment to the electric-vehicle maker as the company board prepares for a shareholder vote on a lucrative new pay package that could deliver him as much as $1 trillion in stock over the next decade.

Shares in Tesla, which closed Friday at $395.94 each, jumped more than 8% in premarket trading Monday. The company is up more than 66% over the past six months.

Before Friday’s purchases, Musk owned around 15% of Tesla stock, according to FactSet data.

Tesla’s board said the unprecedented pay package was intended to keep Musk focused on the electric carmaker at a time when other business and political projects have threatened to take over. The carmaker’s brand and its sales have taken a hit from Musk’s political activities and now-frayed alliance with President Trump. Profit fell 71% in the first quarter of this year, and 16% in the second.

Musk has talked up his plans for Tesla, particularly the robotaxis business. Despite his bet on the company, the CEO has also cautioned the company could see “a few rough quarters” after U.S. government incentives for EV-purchases expire later this month.

Earlier this year, Tesla board members reached out to executive search firms to work on a formal process for finding Tesla’s next CEO and some pressed the longtime leader to spend more time at the company, The Wall Street Journal previously reported.

Shareholders are set to vote on the new pay structure on Nov. 6.

Write to Gareth Vipers at gareth.vipers@wsj.com

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