Tesla’s board of directors has made more than $3 billion in compensation from stock awards over the years, far more than other top U.S. tech companies. This huge amount of money came mostly not from regular pay but from stock options that grew massively in value as Tesla’s share price soared.
Tesla directors earned these windfalls even though the board stopped giving itself new stock awards in 2021. They agreed to pause compensation that year to settle a shareholder lawsuit over excessive pay. Still, the stock awards they received before that decision continued to grow in value for many of the directors, making them extremely wealthy from what is technically a “part‑time board job.”
According to an analysis by compensation experts at Equilar, Tesla directors received pay that is now worth far more than what directors at the other six biggest tech companies earned. These companies are part of what investors call the “Magnificent Seven”, Nvidia, Alphabet (Google’s parent), Meta, Apple, Microsoft, and Amazon, whose stocks helped drive a long bull market for U.S. shares.
Tesla’s board chair, Robyn Denholm, has earned about $650 million from stock awards since joining the board in 2014. Ira Ehrenpreis, a long‑time director, has made about $869 million since 2007. Kimbal Musk, Elon Musk’s brother, has made nearly $1 billion from his stock‑based compensation since 2004. These figures reflect how much the original stock awards appreciated over time.
Between 2018 and 2020, before the pay suspension, Tesla directors on average received about $12 million per year in combined cash and stock compensation. That was roughly eight times more than the average director at Alphabet during the same period.
Tesla acknowledged how much its board members have benefited from stock gains, but a company spokesperson told Reuters that the pay is not “excessive,” saying it is closely tied to Tesla’s stock performance and value creation for shareholders. The spokesperson also said Tesla directors work hard and spend a lot of time on company matters, noting that in 2024 they attended 58 full‑board or committee meetings, which is well above what most boards typically hold.
One unusual feature of Tesla’s pay practice is that the board was compensated mainly with stock options rather than direct stock awards. A stock option gives the holder the right to buy company stock in the future at a fixed price. If the stock price rises above the fixed price, the option holder can buy shares at a discount and profit. If the stock price falls, the option holder does not lose money, they simply do not exercise the option.
Many corporate governance experts prefer that directors be paid with direct shares instead of options. If directors own shares directly, the value of their holdings falls when the company’s stock loses value, better aligning their incentives with shareholders. But options have no risk of loss for the director if the stock price drops, and only reward them if the stock goes up.
Tesla’s spokesperson argued that options create an “at‑risk” incentive because directors only benefit if the stock appreciates. But critics say this structure gives Tesla directors much greater upside potential without downside risk, a combination few companies offer.
Four governance experts who reviewed the Equilar analysis for Reuters said Tesla directors are paid so much that their independence could be compromised. When board members’ personal wealth depends heavily on the company’s stock, they may be less likely to challenge the CEO or push back on key decisions.
One expert, Douglas Chia, said bluntly: “Tesla directors are ridiculously overpaid. Are you actually incentivized to do a better job by being paid this much? Probably not.” He and others argue that generous pay can weaken the board’s oversight role.
Another governance expert, Charles Elson, noted that Tesla’s defense, that directors only make money if the stock goes up, does not change the fact that options can magnify returns far more than direct stock ownership. Many experts recommend “restricted stock” awards that vest over time, giving directors more shared risk with shareholders.
Tesla’s board compensation has not only drawn criticism from governance specialists but has also been a legal battleground. A Delaware court invalidated Tesla’s massive CEO pay package given to Elon Musk in 2018, now worth about $132 billion, on grounds that board members’ compensation and personal ties to Musk compromised their negotiating independence. Tesla appealed and proposed a new deal worth at least $42 billion if the original is overturned.
In September, the board proposed another compensation plan for Musk that could grant him up to $1 trillion in stock awards over the next decade, worth about $878 billion after accounting for what Musk would pay for the shares, far beyond what any CEO has ever received in history.
Even with pay suspended since 2021, Tesla directors still earned more on average than their peers at other tech giants. From 2018 through 2024, Equilar found that Tesla directors averaged about $1.7 million per year in compensation, about 2.5 times more than directors at Meta, the next highest among the Magnificent Seven.
The lifetime compensation figures also show differences in how much directors exercised and cashed out their options. While Tesla’s top‑earning directors have taken home hundreds of millions in profits, some directors who joined after pay was suspended received much lower total compensation.
Some directors at other tech giants also benefited from stock appreciation, but in most cases, their original compensation awards were in line with industry norms when granted. Equilar could not always separate directors’ personal stock purchases from stock awarded for board service in its lifetime totals, but in Tesla’s case all personal purchases are public because the rules required disclosure.
In response to the analysis questions about how Tesla board pay compares to peers, companies like Alphabet, Meta, and Apple acknowledged that some directors had purchased shares that were included in compensation estimates but declined to comment further. Nvidia, Microsoft and Amazon declined to comment.
Critics of Tesla’s pay practices emphasize that no other major tech company has faced similar legal challenges over board compensation. They argue that Tesla’s huge stock‑option awards to directors could discourage honest oversight, as directors who owe much of their wealth to the stock may be reluctant to take positions that could upset management or shareholders.
Board chair Robyn Denholm and director Kathleen Wilson‑Thompson are among those whose compensation from Tesla stock has made up the majority of their wealth. Denholm, a former accounting executive, has described her Tesla compensation as “life‑changing” and used her earnings to start an investment firm and buy stakes in new businesses including professional basketball teams.
Wilson‑Thompson, a former HR executive, made about $234 million in seven years on her stock awards, according to Equilar. Both declined to be interviewed for the Reuters analysis.
Corporate governance experts say independence is especially at risk when a director’s largest source of wealth comes from the board seat itself. In Tesla’s case, that description fits several directors, raising questions about whether the board can truly offer objective oversight when its members have so much at stake financially.
Tesla’s board compensation story highlights broader debates about pay, incentives, and accountability in corporate governance, and why critics say directors’ pay matters just as much as executive pay.
