Much of that wealth traces back to unusually large stock-option grants made during the past decade, particularly between 2018 and 2020. While Tesla’s board has not awarded itself new stock compensation since 2020 and formally suspended director pay beginning in 2021 as part of a shareholder lawsuit settlement, the value of earlier grants has continued to swell alongside Tesla’s share price.
Several individual payouts stand out. Kimbal Musk, the CEO’s brother and a board member since 2004, has realized nearly $1 billion based on the appreciated value of options he has held or sold. Ira Ehrenpreis, a director since 2007, has collected roughly $869 million, while board chair Robyn Denholm has earned about $650 million since joining in 2014. These figures reflect appreciation over time rather than new grants, but they nonetheless underscore how lucrative Tesla board service has become.
Between 2018 and 2020, before compensation was suspended, the average Tesla director received about $12 million in combined cash and stock—roughly eight times the average compensation of a director at Alphabet, the next highest-paid board among the so-called “Magnificent Seven” technology companies. Even when factoring in four years of zero pay after the suspension, Tesla directors still averaged $1.7 million annually from 2018 through 2024, more than double the next-highest peer, Meta.
The broader context is important. All seven companies in the Magnificent Seven—Tesla, Nvidia, Alphabet, Meta, Apple, Microsoft, and Amazon—have seen stock prices soar, enriching executives and directors alike. But Equilar’s analysis found that Tesla is unique in how much the size of its original director awards contributed to the vast personal wealth accumulated from board service. At other firms, directors were typically compensated closer to industry norms, with fortunes accruing more gradually over longer tenures.
Tesla has defended its approach. In a statement to Reuters, a company spokesperson said director compensation is “not excessive but directly tied to stock performance and shareholder value creation,” adding that board members devote extraordinary time and effort to the company. The spokesperson pointed to 58 full-board or committee meetings held in 2024, a frequency the company says exceeds industry norms.
A key point of contention is Tesla’s heavy use of stock options rather than restricted shares to pay directors. Options, which give holders the right to buy shares later at a fixed price, can generate enormous upside if the stock rises but carry little downside risk. Governance experts often criticize this structure, arguing that it magnifies rewards without exposing directors to losses if share prices fall. According to the National Association of Corporate Directors, only about 5% of the largest 200 U.S. companies by revenue compensate directors with options.
Tesla counters that options create a more “at-risk” incentive, since they are worthless unless the stock price rises. Still, many governance specialists argue that paying directors in restricted stock—with vesting requirements and exposure to both gains and losses—better aligns directors’ interests with those of ordinary shareholders.
Four governance experts who reviewed Equilar’s findings for Reuters said Tesla’s compensation practices risk undermining board independence. Douglas Chia, an independent governance consultant, described the pay levels as excessive and questioned whether such sums meaningfully improve oversight. Others noted that when a board seat becomes a director’s primary source of wealth, it may discourage tough scrutiny of management.
Those concerns have already surfaced in court. Last year, a Delaware judge invalidated Elon Musk’s 2018 CEO pay package—now worth an estimated $132 billion—finding that the board’s close ties to Musk and its own compensation compromised its independence. Tesla has appealed the ruling and pledged to award Musk a replacement package worth at least $42 billion if the appeal fails. More recently, the board proposed another compensation plan that could grant Musk stock potentially worth hundreds of billions of dollars over the next decade.
Equilar’s review also examined lifetime compensation across the Magnificent Seven. While directors at companies like Nvidia and Alphabet collectively hold or have sold billions of dollars in stock, those totals are influenced by long tenures and, in some cases, personal stock purchases made before disclosure rules took effect. Tesla’s case is clearer: none of its directors joined before modern disclosure requirements, and personal stock purchases account for only a small fraction of their estimated lifetime gains.
Legal challenges over allegedly excessive director compensation have so far been unique to Tesla among its peer group. Governance experts say that distinction stems not from Tesla’s performance, but from how generously and aggressively its board compensated itself at the outset.
As one consultant put it, the responsibilities of a Tesla director are not fundamentally different from those at any other large public company. The question raised by the numbers, critics argue, is not whether Tesla has succeeded, but why its directors have been rewarded so much more richly than everyone else.