While the median pay for U.S. CEOs last year was nearly 200 times higher than that of a typical company worker, Elon Musk’s extraordinary compensation at Tesla surpasses all comparisons.
Tesla shareholders recently voted overwhelmingly to reinstate Musk’s 10-year pay plan, initially valued at $44.9 billion in April, although its value has since decreased due to a decline in Tesla’s stock by about 25%.
The compensation, entirely in stock, was originally approved by the board and shareholders in 2018. It rewards Musk for achieving specific milestones, such as increasing Tesla’s market value, pretax income, and revenue.
Earlier this year, a Delaware judge invalidated the plan, criticizing its approval process as flawed and highlighting Musk’s control over Tesla’s board, which raised concerns among shareholders.
Elon waves his hand as he leaves a factory (Via Dale Simmons/Shutterstock)
Tesla argues that Musk deserves this compensation for transforming Tesla into the world’s leading electric vehicle manufacturer, significantly increasing its market value.
Despite the recent shareholder approval, Musk will not immediately receive the stock options. Tesla plans to request a reconsideration of the judge’s decision in light of the vote. If unsuccessful, the company may appeal to Delaware’s Supreme Court, a process that could extend over several months.
Regardless of the legal outcome, Musk’s compensation package — the largest ever awarded to a CEO of a U.S. public company — far exceeds those granted to other corporate leaders.
