Key Takeaways
- Tesla (TSLA) shares saw a 2% increase in pre-market trading following the approval of a 96 million share award to CEO Elon Musk, valued at approximately $29 billion.
- Rheinmetall AG (RHM) secured a significant contract from the German Armed Forces to supply over 1,000 logistics vehicles, part of a larger framework agreement.
- Spotify (SPOT) is set to increase its premium subscription prices to €11.99 in certain markets, as part of a strategy to boost profitability amid slowing streaming growth.
- Elon Musk is required to pay $23.34 per share for the vested Tesla stock, a detail revealed in an SEC filing.
- Tesla does not currently expect to record compensation costs for the 96 million share award to Elon Musk, as it does not believe the performance condition will be met initially, though this will be reassessed quarterly.
Electric vehicle giant Tesla (TSLA) is making headlines with the approval of a substantial 96 million share restricted stock award to its CEO, Elon Musk. The award, referred to as the "2025 CEO Interim Award," was approved by Tesla's board of directors on Sunday, following a recommendation from a special committee. This comes after a Delaware court voided Musk's original 2018 compensation package. The shares, valued at approximately $29 billion, are subject to a two-year vesting period and require Musk to remain in continuous service as CEO or an executive officer responsible for product development or operations. Notably, Musk will pay $23.34 per share for any vested restricted stock, matching the exercise price of the 2018 CEO Award. Despite the significant award, Tesla currently does not anticipate recognizing a compensation expense upon issuance, as it does not believe the performance condition will be met, a probability that will be reassessed quarterly. The news spurred a positive market reaction, with Tesla shares rising over 2% in pre-market trading.
In the defense sector, German technology group Rheinmetall AG (RHM) has secured a new contract from the German Armed Forces, the Bundeswehr, for the supply of over 1,000 logistics vehicles. This order is a further call-off from a larger framework contract signed in July 2017, which encompasses a total of over 2,200 military trucks. The recent order, valued at nearly €400 million including value-added tax, includes 675 vehicles with a five-ton payload and 325 with a 15-ton load-carrying capacity. Production of these trucks will commence in January 2020 at the Rheinmetall MAN Military Vehicles GmbH (RMMV) plant in Vienna, with delivery expected to be completed by the end of the year. This contract underscores Rheinmetall's crucial role in modernizing the Bundeswehr's truck fleet and enhancing its logistical capabilities.
Meanwhile, in the streaming industry, Spotify (SPOT) is planning to increase the price of its Premium subscriptions to €11.99 in some markets. This move follows recent price increases in the Benelux region, where a premium subscription now costs €12.99 in the Netherlands and Luxembourg, and €11.99 in Belgium. The price adjustments are part of Spotify's broader strategy to boost revenues and maintain financial sustainability, especially as growth in the music streaming sector has begun to slow. While the US, Spotify's largest market, will be excluded from these immediate adjustments, the company has been increasingly focused on profitability, having recorded its first full year of operating profit in 2024.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.