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

Dec 15 (Reuters) - Tesla's (TSLA) committee of directors has earned much than $3 cardinal done banal awards that acold exceeded the worth of those fixed to peers astatine the biggest U.S. exertion firms astatine the clip they were paid, according to an investigation performed for Reuters by compensation and governance specializer Equilar.

The investigation recovered CEO Elon Musk's member Kimbal has earned astir $1 cardinal since 2004, based connected the appreciated worth of banal options held oregon liquidated. Director Ira Ehrenpreis has collected $869 cardinal since 2007. Board seat Robyn Denholm has made $650 cardinal since 2014.

Directors reaped specified windfalls adjacent though they haven't awarded themselves caller banal grants since 2020. The committee agreed to suspend manager ​compensation starting successful 2021 to settee a shareholder suit alleging excessive board-member pay. Between 2018 and 2020, however, the mean Tesla manager received a full of astir $12 cardinal successful cash-and-stock compensation. That was astir 8 times arsenic overmuch arsenic the mean manager astatine Alphabet, the adjacent highest-paid among the "Magnificent Seven" companies implicit the aforesaid period.

The worth of those archetypal awards ‌skyrocketed on with Tesla's stock terms successful consequent years. That's besides existent of the different six firms successful the Magnificent Seven – Nvidia (NVDA), Alphabet (GOOG), Meta (META), Apple (AAPL), Microsoft (MSFT) and Amazon (AMZN) – which got that sanction due to the fact that their soaring stocks person been a large operator of the long-running bull market.

But Tesla is the lone institution among that cohort wherever the size of directors' archetypal banal awards played specified an outsized relation successful the immense wealthiness they've earned from these part-time jobs, the Equilar investigation shows. Tesla directors' ‌average compensation betwixt 2018 and 2024 – including the 4 years of suspended wage – was inactive two-and-a-half times that of Meta (META) directors, the adjacent highest-paid implicit the seven-year period.

In a connection to Reuters, a Tesla spokesperson said its directors' compensation "is not excessive but straight tied to banal show and shareholder worth creation." The connection added that committee members supply bonzer work to Tesla and give "substantial clip and effort," for illustration by attending 58 full-board oregon committee meetings successful 2024. The spokesperson said that gathering frequence was good supra manufacture norms.

Tesla's committee besides paid itself successful banal options alternatively of shares, a uncommon signifier criticized by immoderate corporate-governance specialists due to the fact that it magnifies directors' upside imaginable with nary downside risk. Tesla directors person exercised tens oregon hundreds of millions of dollars successful options to day but besides proceed to clasp likewise ample amounts, Equilar found.