As Sales Continue to Plummet, Tesla Is Considering a Massive Payday for Elon Musk

As car sales plunge and its brand image goes up in flames, Tesla's board has formed a special committee of exactly two people to review CEO Elon Musk's compensation — including potentially offering him a brand new pay package in stock options, the Financial Times reports.

The two committee members are Tesla's chair, Robyn Denholm, and Kathleen Wilson-Thompson. Its existence was disclosed with just a single sentence in a filing last month, causing major investors to reach out to the board to gauge their feelings on Musk, according to the FT.

Along with a new pay package, the committee will also consider ways to compensate Musk for past work if Tesla can't go through with his outrageous 2018 pay package worth over $98 billion in today's stock options, which was blocked by a Delaware judge last year and is currently undergoing appeal in the state's supreme court.

Shareholders, meanwhile, are terrified that their supreme leader will leave the company if he doesn't get all the money he was promised.

It's a questionable moment for Tesla to be worrying about furnishing Musk, the world's richest man, with billions of more dollars, since he's a big reason why the automaker is in crisis mode. His extremist views and his role in the Trump administration have inflamed public opinion of himself and his automaker, which reported its first-ever annual decline in sales last year and has inauspiciously started this year with a 13 percent sales plunge in the first quarter.

He also made a disastrous gamble with the widely reviled Cybertruck and could be stumbling into another one by betting the company's future on a dubious pivot to the robotaxi business. 

Musk's payout has been a lengthy saga. First proposed in 2018, the exorbitant pay package has faced legal challenges in Delaware, where Tesla was originally incorporated. In January 2024, the deal — at the time worth $56 billion — was blocked by Delaware supreme court judge Kathaleen McCormick, who ruled that the "unfathomable sum" was excessive and unfair to shareholders. When she threw out the plan for a second time in December 2024, McCormick accused Musk of controlling the Tesla board and holding sham negotiations.

Critics have long accused the automaker's board of being too submissive to Musk (or, in McCormick's view, acting "like supine servants of an overweening master"). And with many of them making eye-watering sums by offloading their own shares in the company, some doubt they're always acting in Tesla's best interests.

Denholm, chair of the company's board, has dumped $198 million worth of Tesla stock in the past six months alone, the New York Times reported. Since being hand-picked by Musk to lead the board in 2018, she's made more than $530 million, far more than her peers at the most valuable US companies. That does not signal someone who's committed to the company's long-term success.

As it stands, the committee is still in the early stages of deliberation, according to the FT, with no guarantees on reaching an agreement on Musk's new compensation package.

If the voided 2018 deal is reinstated on appeal, it would raise Musk's ownership of the company from 13 percent to over 20 percent. Even this may not be enough to satisfy Musk, however. In May last year, he threatened to take away Tesla's AI and robotics products and build them at his other companies, like xAI, if he wasn't given 25 percent ownership.

But if Tesla decides to issue a new payment package, it'll come at an enormous cost: on top of Musk's payment, Tesla would have to pay a $50 billion accounting charge, plus a 57 percent punitive tax for Musk.

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