Tesla board members pulled in more than $3 billion after old option awards shot up with the company’s stock, according to data from Equilar.
The gains came from option packages that were already considered rich back when they were issued, and they grew far beyond anything directors at other major tech firms received.
Kimbal Musk collected almost $1 billion from options granted since 2004. Ira Ehrenpreis made $869 million from grants issued since 2007.
Robyn Denholm reached $650 million from awards she has held since 2014. All of these earnings came even though the board stopped giving itself new stock in 2020 and froze all compensation starting in 2021 after a lawsuit accusing Tesla of overpaying its directors.
Between 2018 and 2020, the average Tesla director received about $12 million in cash and stock. That was eight times the pay of an Alphabet director in the same period and far above Meta, Nvidia, Apple, Microsoft and Amazon.
Tesla’s stock later ripped even higher, and the original grants ballooned with it. Equilar said Tesla directors still earned two-and-a-half times as much as Meta directors from 2018 to 2024, even with four years of suspended pay.
A Tesla spokesperson allegedly said that the company’s pay is “not excessive but directly tied to stock performance and shareholder value creation,” adding that directors attended 58 meetings in 2024, which the company said was far above industry levels.
Tracking the Tesla board’s options gains
Tesla stands out for one reason: it paid directors in stock options, not shares. Only 5% of large S&P 500 firms do that, and experts say the practice gives directors huge upside without risk.
Tesla directors have already exercised tens or hundreds of millions of dollars’ worth of options and still hold large amounts today. Options allow the holder to buy stock at a fixed price. If the market price falls, they can walk away.
If it climbs, they buy cheap and sell at a profit. Governance experts reportedly prefer directors to receive shares instead of options because shares lose value when the stock drops, which aligns directors with investors.
Tesla pushed back. Its spokesperson said options create a more “at-risk” structure because directors only get paid when the stock rises, while shares still hold some value “as long as the stock exceeds $0.”Some experts rejected that logic.
Douglas Chia said, “Tesla directors are ridiculously overpaid.” Charles Elson said options “tend to magnify returns dramatically.”
Four specialists who reviewed the numbers said Tesla’s heavy option use weakens director independence when overseeing Elon Musk.
The board’s pay practices were also blasted in a Delaware ruling that threw out Musk’s 2018 pay package, now worth $132 billion. The judge said the directors’ personal ties to Musk and their own high pay distorted negotiations.
Tesla appealed and promised Musk a fallback package worth at least $42 billion if it loses. In September, the board proposed another plan that could hand Musk up to $1 trillion in Tesla stock over the next decade, valued at about $878 billion after costs.
Detailing the wide pay gap
Equilar said Tesla directors averaged $1.7 million a year from 2018 to 2024. Meta directors averaged $685,000. Amazon directors made $307,000. Tesla’s $3 billion total went to five long-serving members.
The other three (Jeffrey Straubel, Jack Hartung and Joe Gebbia) joined after the pay freeze. All five high-earning directors cashed out large option blocks. James Murdoch took the smallest payout at $81 million. Robyn took the largest with $595 million, or 91% of her lifetime total.
Equilar tried to compare Tesla with the rest of the Magnificent Seven but said lifetime numbers were messy because other directors often bought stock personally. Nvidia board members collectively held or sold $17 billion in shares.
Alphabet’s directors held or sold $5 billion. Those totals include company-issued shares and personal purchases. Tesla avoided that issue because none of its directors joined before 2003, the year disclosure rules changed.
Disclosures show Robyn and Kathleen Wilson-Thompson made small personal Tesla purchases worth $6.8 million and $2.5 million, about 1% of each of their lifetime totals.
Governance specialists said that Tesla stands alone in facing legal challenges over board pay. They said high option grants make directors less likely to challenge Musk. Robyn and Wilson-Thompson helped design Musk’s latest package and have said Tesla pay makes up most of their wealth.
Robyn used her gains to fund a family investment group in Australia and warned shareholders that Musk might walk if his package didn’t pass. Wilson-Thompson has earned $234 million in seven years.
Chia said nothing about Tesla suggests its board should earn far more than peers and asked the question many investors keep repeating: “What makes Tesla directors so special?”
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