Tesla’s board of directors has earned over $3 billion in stock awards, with CEO Elon Musk’s brother Kimbal making nearly $1 billion since 2004. The board agreed to suspend compensation in 2021 due to a shareholder lawsuit. Directors’ compensation far exceeds peers at companies like Alphabet.

Tesla’s board paid itself in stock options, criticized for magnifying upside potential with no downside risk. Experts recommend paying directors in shares to align interests with shareholders. Only 5% of S&P 500 companies issue directors options, while Tesla directors have cashed out millions.

The Tesla board’s extraordinary compensation raises concerns about director independence. Critics say such high pay doesn’t incentivize better performance. Experts recommend paying directors in restricted stock to better align interests with shareholders. Shareholder lawsuit and court ruling challenged Tesla board’s compensation practices.

Tesla directors averaged $1.7 million annually from 2018-2024, despite most pay being suspended. Total lifetime compensation for Tesla directors exceeded $3 billion, with some liquidating large amounts of options. Other Magnificent Seven firms also saw directors reaping huge sums as company values surged.

Tesla’s board faced legal challenges over excessive compensation, unlike peers in the Magnificent Seven. Generous stock-option grants at Tesla could compromise directors’ oversight. Experts say stock awards discourage highlighting problems for fear of losing board seats. Denholm and Wilson-Thompson played key roles in crafting Musk’s pay package.

Tesla directors’ independence may be compromised by significantly higher-than-standard compensation. Denholm and Wilson-Thompson declined interview requests. Experts question why Tesla directors deserve vastly higher pay than peers. Governance specialists emphasize the need for alignment of interests between directors and shareholders.

Read more at Yahoo Finance: Exclusive-Tesla board made $3 billion via stock awards that dwarfed tech peers