Shares in EV maker Tesla (TSLA) rose more than 1% early Monday even after a Reuters analysis highlighted over $3 billion in gains from board stock awards between 2018 and 2020, far exceeding those at other “Magnificent Seven” firms.
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“Magnificent Seven” is a nickname for the seven Big Tech companies that have dominated market returns in recent years. Apart from Tesla, they include Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), Alphabet (GOOGL), Meta (META), and Nvidia (NVDA).
The analysis, conducted on behalf of the outlet by the corporate leadership-focused data analytics firm Equilar, found that the average director at Tesla received about $12 million in combined cash and stock-based compensation during the stated period. This happened before the EV producer’s board in 2021 shelved compensation to directors to settle a shareholder lawsuit accusing the board of being paid excessively.
Report Draws Attention to Tesla’s Board Compensation
However, the analysis found that the figure towers eight times above those paid to directors at Alphabet (GOOGL), which houses the second-best-paid directors of the Big Tech group. Huge spikes in TSLA shares over the years helped to raise the value of those awards, and Tesla stands out in the group for the key role the stock awards from the stated period contributed to directors’ fortunes.
The analysis found that board member Kimbal Musk, a brother to CEO Elon Musk — who is himself part of the nine-member board — has generated close to $1 billion since 2004 in gains on Tesla stock options he has exercised or still holds.
A spokesperson for Tesla told the outlet that compensation for the company’s directors is not outsized and is closely linked to Tesla’s share performance and the value created for investors.
Tesla Battles Falling Vehicle Sales
The report draws renewed scrutiny to the EV maker and its board, after the board’s hefty $1 trillion pay package for Elon Musk faced weeks of criticism and protests before it was approved by an overwhelming number of shareholders last month.
The report also comes as Tesla’s vehicle sales continue to fall in November across both the U.S. and Europe, with only sales in China bucking the trend.
Is Tesla a Buy or Sell?
On Wall Street, Tesla’s shares continue to carry a Hold consensus rating from analysts based on 12 Buys, 12 Holds, and 10 Sells issued over the last three months.
In addition, the average TSLA price target of $383.54 indicates about 16% downside risk from current trading levels.
