Tesla Directors Receive Record $3 Billion in Stock Compensation

Unprecedented Compensation Figures

Tesla Inc.'s board members have collectively received over $3 billion in stock-based compensation, a figure that significantly surpasses what directors at other major US technology companies have received during the same period. According to an analysis by compensation and governance consultancy Equilar, conducted for Reuters, this amount is particularly noteworthy given that Tesla stopped granting new stock awards to its directors in 2020.

Key Beneficiaries of Tesla's Compensation

The analysis revealed that Kimbal Musk, brother of CEO Elon Musk, has pocketed nearly $1 billion since 2004 from stock options that have appreciated or been exercised. Other significant beneficiaries include Ira Ehrenpreis, who has collected approximately $869 million since 2007, and Robyn Denholm, Chair of the Board, who has received around $650 million since 2014. These figures highlight the substantial financial rewards that Tesla's directors have enjoyed through their stock-based compensation.

Context and Controversy

It's worth noting that despite the large sums involved, Tesla's board agreed to suspend director compensation starting in 2021 as part of a settlement related to a shareholder lawsuit alleging excessive pay to board members. This suspension occurred even as the previously granted stock options and awards continued to vest and be exercised, resulting in the significant compensation figures reported.

Implications for Corporate Governance

The case of Tesla's directors raises important questions about corporate governance and executive compensation practices. While the compensation was based on previously agreed-upon awards, the sheer scale of the payouts has drawn attention to the need for transparent and fair compensation structures in corporate America.