Exclusive-Tesla board made $3 billion via stock awards that dwarfed tech peers

Core Insights - Tesla's board of directors has earned over $3 billion through stock awards, significantly exceeding compensation at peer technology firms [7] - The compensation structure, primarily based on stock options, has drawn criticism for potentially compromising directors' independence and oversight of the company [10][25] Compensation Structure - Tesla's directors have been compensated primarily through stock options rather than shares, a practice criticized for magnifying potential gains without corresponding risks [1][8] - Between 2018 and 2024, Tesla directors averaged $1.7 million annually in compensation, despite a suspension of pay for part of this period [14] - The average compensation for Tesla directors during 2018-2020 was approximately $12 million, eight times that of Alphabet directors [5] Performance and Wealth Accumulation - The value of stock awards for Tesla directors has increased alongside the company's share price, contributing to substantial wealth accumulation [4][6] - Notable earnings include Kimbal Musk at nearly $1 billion, Ira Ehrenpreis at $869 million, and Robyn Denholm at $650 million [6] Governance and Oversight Concerns - Experts argue that the high compensation levels may undermine the board's ability to effectively oversee CEO Elon Musk and the company [10][28] - Critics suggest that directors should be compensated in restricted stock to better align their interests with shareholders [11] Legal and Regulatory Context - Tesla's board faced a shareholder lawsuit over excessive compensation, leading to a suspension of director pay starting in 2021 [5][12] - A Delaware court ruling invalidated a previous pay package for Musk, citing excessive compensation and conflicts of interest among board members [12] Comparison with Peers - Tesla's directors' compensation is notably higher than that of peers in the "Magnificent Seven" tech firms, with Tesla directors earning two-and-a-half times more than those at Meta [3][14] - Other firms in the cohort have not faced similar legal challenges regarding director compensation, indicating that Tesla's practices are out of line with industry norms [24]