The board members of Tesla Inc. (NASDAQ:TSLA) have reportedly amassed over $3 billion through stock awards, collectively, surpassing the value of similar incentives at other major U.S. tech firms.
Tesla Board Stock Awards Scrutinized
An analysis by compensation and governance specialist Equilar and Reuters disclosed that Tesla’s board members have reaped these substantial rewards despite not awarding themselves new stock grants since 2020.
Tesla board members have earned massive sums over the years, with Kimbal Musk making nearly $1 billion since 2004, Ira Ehrenpreis $869 million since 2007, and chair Robyn Denholm $650 million since 2014.
Even though the board members agreed to halt director compensation from 2021 onwards to settle a lawsuit filed by shareholders alleging excessive pay, they had already received an average of about $12 million in cash-and-stock compensation between 2018 and 2020.
This amount was roughly eight times greater than what the average director at Alphabet.com (NASDAQ:GOOG) (NASDAQ:GOOGL), the next highest-paid company among the “Magnificent Seven,” earned during the same period, as per the analysis.
The report further revealed that between 2018 and 2024, Tesla's board members earned, on average, including the four years of suspended pay, 2.5 times more than Meta Platform's (NASDAQ:META) directors, who were the next highest-paid over the seven-year span.
Tesla's board also opted for compensation in stock options rather than shares, a practice some corporate-governance experts criticize for potentially boosting directors' upside without exposing them to downside risk.
Musk Family Moves Spark Concern
The revelation of the substantial stock awards for Tesla’s board members comes at a time when the company is in the spotlight for various reasons. Just recently, Kimbal Musk, brother of CEO Elon Musk and a board member of Tesla, offloaded over $25 million worth of Tesla shares. This move raised questions about the Musk family’s confidence in the company’s future performance.
Moreover, Elon Musk’s $1 trillion pay package, a first in global corporate history, has been a topic of debate. Critics have pointed out potential loopholes that could allow Musk to reap substantial benefits by making grand promises and delivering just enough to secure a significant reward.
Benzinga's Edge Rankings place Tesla in the 67th percentile for quality and the 53rd percentile for growth, reflecting its average performance in both areas. Check the detailed report here.
Price Target: On a year-to-date basis, Tesla stock climbed 21.01% as per data from Benzinga Pro. On Friday, it rose 2.71% to close at $458.96.
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