Tesla puts Elon Musk’s billion-dollar pay package under review – Here's why
Tesla has formed a special two-member board committee to explore revised compensation options for its CEO, Elon Musk, after a US court earlier this year invalidated his previous multibillion-dollar pay package. According to a report published by the Financial Times, the committee could propose a new stock options deal dependent on Tesla’s future performance.
The committee includes Tesla Chair Robyn Denholm and independent board member Kathleen Wilson-Thompson. Citing sources familiar with the matter, the Financial Times reported that the committee is also evaluating possible ways to reward Musk retroactively if his 2018 pay agreement is not reinstated through ongoing court appeals.
In January 2024, a Delaware court struck down Musk’s record-breaking compensation package—originally valued at over $50 billion—arguing that the board’s approval process lacked fairness and failed to adequately protect shareholder interests. The 2018 deal had been widely scrutinised for concentrating too much power in Musk’s hands without sufficient oversight or objective evaluation.
Musk responded by appealing the ruling in March, claiming that the court had committed multiple legal errors in its judgment. The outcome of the appeal remains pending, but the board’s latest move suggests it is preparing for alternative outcomes.
Tesla has not issued an official comment on the committee’s formation or its mandate. Similarly, Denholm and Wilson-Thompson have not responded to media enquiries. However, the company did previously acknowledge the creation of a special committee last month, although no details were shared at the time.
The evaluation of a new pay structure comes at a crucial moment for Tesla. With Musk owning roughly 13% of the company’s stock, he continues to wield significant influence. Meanwhile, Tesla is undergoing a strategic shift—from being primarily seen as an electric vehicle manufacturer to positioning itself as a leader in artificial intelligence and robotics.
Musk has recently redirected attention away from Tesla’s long-promised affordable electric vehicle towards more ambitious innovations such as autonomous robotaxis and humanoid robots. These moves mark a departure from Tesla’s traditional automotive roadmap and have sparked debate among analysts and investors about the company’s long-term direction.
The outcome of the board committee’s review could reshape how executive compensation is handled at Tesla, especially considering the controversy surrounding Musk’s earlier payout. Any new stock options deal would reportedly be conditional upon Tesla meeting strict financial, operational, and share price milestones—echoing the structure of the original 2018 agreement but likely with increased transparency and governance.
In another development related to corporate governance, Tesla has delayed the release of its annual proxy statement. The delay has been attributed to ongoing internal discussions, including the absence of a finalised date for the annual shareholder meeting. This delay is notable, as Tesla usually submits the filing several weeks ahead of the meeting.
Adding to the uncertainty, Denholm recently denied a report by The Wall Street Journal claiming that the board was actively seeking a successor to Musk through external executive search firms. The report, which cited anonymous sources, was dismissed as inaccurate by Tesla leadership.
With growing scrutiny over corporate governance, investor rights, and executive accountability, Tesla’s next steps will be closely watched. The eventual resolution of Musk’s compensation—whether through the court system or board initiative—will likely set a precedent for how founder-CEOs are rewarded in high-growth tech and AI-led companies.