Tesla Directors Cash In $3 Billion From Stock Options Amid Compensation Freeze

Tesla's board members have realized nearly $3 billion in gains from stock options granted over the past two decades, despite the company freezing director compensation since 2021. The windfall stems from options packages that were already substantial when issued, then ballooned alongside Tesla's meteoric stock rise.

Kimbal Musk led the group with nearly $1 billion from options dating to 2004, followed by Ira Ehrenpreis's $869 million from 2007 grants. Robyn Denholm collected $650 million from awards held since 2014. These payouts occurred even after Tesla halted new equity grants to directors following shareholder litigation over excessive compensation.

The electric vehicle maker's compensation structure stands apart from tech peers by using options rather than straight stock awards. Between 2018-2020, Tesla directors averaged $12 million annually - eight times Alphabet's board pay and significantly above other major tech firms. Even with four years of suspended compensation, Tesla's board outearned Meta's directors by 2.5x from 2018-2024.

A Tesla spokesperson defended the payouts as performance-linked, noting directors attended 58 meetings in 2024 - far above industry norms. The gains underscore how early option grants in high-growth companies can yield extraordinary returns long after issuance.