Tesla's outside directors have turned their part-time board seats into more than $3 billion in stock-based gains—far eclipsing what peers at other tech giants have made, a new Equilar analysis for Reuters finds. Since 2004, CEO Elon Musk's brother, Kimbal, has amassed nearly $1 billion from Tesla options he's held or sold, the study says. Director Ira Ehrenpreis has drawn in about $869 million since 2007, while board Chair Robyn Denholm has taken in roughly $650 million since 2014. Those payouts ballooned despite the board halting director compensation in 2021 as part of a settlement of a shareholder suit over allegedly excessive pay.
"Tesla's directors may have stopped getting 'paid' in the obvious, annual-compensation way, but equity never sleeps," notes Quartz. From 2018 to 2020, the typical Tesla director received $12 million or so in cash and stocks—around eight times the Alphabet average, the next-highest among the "Magnificent Seven" tech firms, per Reuters. What sets Tesla apart isn't just the stock's rise, but the structure and scale of the awards, say governance specialists. Tesla paid directors almost entirely in options, which allow them to profit if shares climb but carry no loss if they fall—an approach used by only about 5% of the 200 biggest S&P 500 firms, per the National Association of Corporate Directors.
Including four years with compensation suspended, Tesla directors still averaged $1.7 million in annual pay from 2018 to 2024, about 2.5 times that of Meta's directors. "Tesla directors are ridiculously overpaid," says corporate governance consultant Douglas Chia, who argues such windfalls can weaken a board's independence. Tesla counters that its directors' pay is "not excessive" and is tightly linked to stock performance and shareholder value, pointing to what it says is an unusually heavy board workload, including 58 full board or committee meetings last year.
But critics say the rich option grants, coupled with personal ties to Musk and the board's role in crafting his record-shattering compensation packages, raise questions about whether directors can effectively oversee the CEO. A Delaware judge last year cited the board's own pay and relationships with Musk in voiding his 2018 package, now valued at about $132 billion; the board is appealing that decision. As Chia puts it: "It's the same job as any other public company. What makes Tesla directors so special?"
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