Tesla Board Gains $3 Billion in Stock Awards, Raising Governance Concerns
Tesla's board members have accumulated over $3 billion in stock awards from 2018 to 2020, significantly surpassing their peers at other tech companies like Alphabet and Meta. During this period, directors received an average of $12 million each, with notable figures such as Kimbal Musk, Robyn Denholm, and Ira Ehrenpreis earning especially large awards. Although Tesla stopped granting new stock awards to directors in 2020 and paused directorship pay in 2021 following shareholder lawsuits, the value of existing equity grants surged as Tesla's stock price soared. Over six years, Tesla directors' earnings were about 2.5 times higher than those at Meta, despite some years without pay. Tesla defends its compensation strategy as aligning board interests with shareholders, but governance experts warn that such large, stock-heavy pay packages could undermine independent oversight of the CEO. This situation raises broader questions about the effectiveness of equity-based pay in promoting true board independence and the need for stricter governance regulations as more companies adopt similar compensation models.
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