Its stock has plunged – down 15% on March 10 alone – and investors are yelping in pain, Reuters reported.
Sixteen time zones away, the woman who ostensibly supervises CEO Musk is faring well: Robyn Denholm, hand-picked by Musk to run Tesla’s board, is the best-paid chair at any public company in the U.S.
The Australian businesswoman has been so richly compensated as Tesla chair that a shareholder lawsuit recently forced her to return part of her fortune. In a separate and ongoing case, a Delaware judge criticized Denholm for okaying a payout for Musk that, if approved by a higher court, would set a record for CEO compensation: $56 billion.
Relatively unknown when she assumed the chair in 2018, the 61-year-old former accountant has since become recognized as the chief defender of the hotly contested pay package. Denholm’s effort to ensure the payout included a court appearance in which she described her own pay from Tesla as “life changing.”
Her Tesla compensation since she first joined the board in 2014 has totaled about $682 million in cash and stock, based on recent market prices, according to a Reuters analysis of regulatory filings and research done at the request of the news organization by Equilar, a California-based compensation and governance specialist.
Robyn Denholm has angered investors because of high compensation for her and other Tesla directors and her defense of a $56 billion dollar payout for Chief Executive Elon Musk. REUTERS/Christine Chen
She’s just paid too much.
The figure, which varies with market fluctuations, has grown rapidly because of the surge in the value of Tesla stock during her time as chair. It is the highest compensation for any director at the biggest public U.S. companies, the analysis shows, and is exponentially more than the $3 million a year Denholm has said she previously earned as a telecoms executive.
Despite the recent fall in Tesla’s shares, Denholm already has banked a fortune: To date, she has cashed in about $532 million worth of Tesla shares, according to Equilar, which analyzed dozens of regulatory filings regarding her compensation and stock sales over her time on the board. Some of those sales came as recently as early March, before the stock’s decline accelerated last week.
With her wealth has come criticism of her compensation – and pointed questions about whether the windfall is compromising her oversight of Tesla and the billionaire who enriched her.
In a ruling last year, the Delaware judge who rejected Musk’s compensation package suggested that Denholm’s lucrative board pay has hindered her ability to perform her duties. “Ordinary, market-rate compensation does not compromise a director’s independence,” wrote the judge, Chancellor Kathaleen McCormick of the Delaware Court of Chancery. “Outsized director compensation can.”
Denholm declined to be interviewed for this story. In a statement, a spokesperson for Denholm said her pay is fair and in line with the gains other Tesla shareholders have reaped because of the stock’s growth over the years.
“Tesla’s Director Compensation program is 100% aligned with shareholder interests,” the statement read. “She only gets paid if the shareholders get paid.”
Tesla and Musk didn’t respond to requests for comment for this report. The billionaire CEO and the Tesla board have argued their high compensation is fair because the company’s stock has outperformed corporate America.
Denholm’s pay as Tesla chair, while extreme, points to a recurring challenge for corporations: ensuring that boards retain enough independence to oversee a powerful CEO. Denholm rarely speaks of Musk in public pronouncements, let alone in rebuke. In her few public remarks about the potential conflict of interest posed by her outsized earnings, Denholm has said her newfound wealth makes her less beholden to Musk, not more. In an interview with the Financial Times newspaper last May, she dismissed as “crap” Judge McCormick’s criticism of her tenure as chair.
“If I didn’t agree with something that was going on at the company, I could walk away tomorrow,” she said.
McCormick declined to comment. She has issued two decisions against the Musk package, most recently in December. Tesla has appealed the ruling to the Delaware Supreme Court.
Some investors are growing deeply worried as Tesla’s sales and stock tank. Since December, when the company’s market value hit a record high of $1.5 trillion, it has fallen by almost half. Besides missing sales targets, Tesla faces heightened investor pressure to produce autonomous vehicles, which Musk has promised but failed to deliver for about a decade.
Musk s ongoing focus as an advisor to President Donald Trump, here touting Teslas at a recent event in Washington, has led to what he calls "great difficulty" in managing the carmaker. REUTERS/Kevin Lamarque/File Photo
Musk also faces questions about his focus on Tesla while he juggles his demanding roles at Trump’s so-called Department of Government Efficiency and his other ventures, including space company SpaceX. Asked in an interview with Fox Business last week how he was managing his businesses while serving as Trump’s cost-cutter, he replied: “With great difficulty.” He said he hoped to continue his DOGE role for at least another year.
Some investors are complaining about Denholm’s supervision of Musk. Although board positions aren’t usually full-time roles with day-to-day management duties, some argue that she is failing to make sure Musk fulfills his own supervisory obligations.
“It’s Robyn and the board’s job to hold this guy’s feet to the fire, and it’s not happening,” said Michael R. Levin, a Tesla shareholder based in Chicago.
“TROUBLING”
Denholm’s Tesla bonanza is now the seedbed of a family investment firm she established in Sydney – and of the high public profile she is cultivating in Australia. She appointed her two children to manage her family firm, whose mission includes investing in Australian startups. Denholm bought Sydney’s two professional basketball teams, and until recently served as operating partner of Australia’s biggest venture capital fund.
In 2021 she emerged onto the “Rich List,” a ranking of the nation’s wealthiest compiled by the Australian Financial Review newspaper. She has also been named to influential roles: advising Australia’s tech sector as chair of a big industry group, and conducting a review for the government of the nation’s research-and-development capacity.
Her multiple sidelines back home, juggling everything from personal property investments to litigation involving one of her basketball teams, don’t reassure Tesla investors. “She has a hard job trying to rein in Musk,” said Levin, the Chicago-based shareholder. “The fact that she has these other commitments in Australia, that’s troubling.”
Denholm’s spokesperson said the chair is deeply engaged. She “takes her board duties very seriously and works tirelessly fulfilling them,” the statement said. “She is in regular contact with the company and travels to the U.S. at least once every quarter for in person meetings with the Board and leadership team.”
In the past week, after Reuters asked about her many activities outside Tesla, representatives at two of her Australian endeavors said Denholm is pulling back. The tech industry group on March 12 announced Denholm would step down as chair later this month. At Blackbird Ventures, the venture capital firm, where marketing materials until this month still called her a partner, a spokesperson told Reuters she is now only a board member.
With declining sales, and growing investor concerns over Musk s extracurricular activities, Tesla stock value has plummeted by almost half since December. REUTERS/Elijah Nouvelage/File Photo
The Reuters review of regulatory, court and property records in the United States and Australia, as well as interviews with 16 people who know the Tesla chair and her family, offer exclusive details about Denholm and the struggle she faces reconciling her Tesla fortune with the expectations of disappointed Tesla shareholders and corporate governance experts.
Nell Minow, a corporate governance expert and Tesla shareholder, said she reduced her own Tesla holdings amid the payout controversy last year. She said many companies overpay their boards for the amount of work directors actually do – but also don’t pay directors enough for all the work shareholders expect of them. Tesla’s compensation of Denholm is an outlier, however, she said: “In her case, she’s just paid too much.”
Musk, the world’s richest person, is also a special case, as he himself has said.
At times, he has boasted that his large ownership stake in Tesla, estimated at about 13% of the stock, makes him impervious to supervision, even by the carmaker’s board. In a 2018 interview with 60 Minutes, the U.S. weekly news program, he said: “I am the largest shareholder in the company and I can just call for a shareholder vote and get anything done that I want.”
Some shareholders and their advocates have suggested ousting Denholm. Institutional Shareholder Services, which advises large investors on company resolutions, has recommended that Tesla stock owners vote against her re-election to the board. Among other criticisms, ISS chastised Denholm in a 2023 report for allowing Musk and his brother, both fellow board members, to borrow against Tesla stock. Corporate governance experts frown on the practice because it can create a conflict of interest, for instance, if a loan must be repaid during a market downturn, depressing stock at a time when the share price needs support.
Anger over Musk s role in slashing the U.S. federal workforce has caused some consumers to avoid Tesla and led demonstrators, like these outside a dealership in California this month, to dissuade others. REUTERS/Laure Andrillon/File Photo
Michael R.Levin, a Tesla shareholder based in Chicago
Denholm’s term is up for a vote again next year, but so far, supported by Musk and his allies, she has remained secure on the board. Her annual cash compensation from Tesla started at $45,000 soon after she joined in 2014 and rose to $219,000 when she became chair four years later. But that’s dwarfed by the hundreds of thousands of stock options awarded her and other directors for much of the past decade.
Stock options are common for senior executives at many corporations. But only 2% of the largest U.S. public companies award them to board members, according to a recent survey by Compensation Advisory Partners, a New York consultancy.
Denholm’s “extraordinary” perk allows her to profit on any increase in the stock’s value while risking no outlay of her own, said Charles Elson, founding director of the Weinberg Center for Corporate Governance at the University of Delaware. Because Denholm invests no money to acquire the stock, the arrangement “doesn’t link her interest with other shareholders.”
Denholm has earned far more than the best-paid directors among the 100 largest public companies in the U.S. by revenue, recent research by Compensation Advisory Partners shows. Considering only her cash compensation and the so-called “grant date accounting” value of stock options, she has been awarded about $3.24 million per year since joining the board – about 10 times the median annual compensation of directors at the other companies, according to the consultancy.
Her lead likely holds true even after a recent settlement worth up to $919 million in which Denholm and other board members agreed to return an unspecified share of their compensation to the company, according to Reuters’ analysis. The settlement, reached in January, followed a shareholder lawsuit alleging that Tesla directors overpaid themselves. That case is distinct from the Delaware suit over Musk’s pay.
Attorneys for the board members said in the settlement filing that directors “acted in good faith and in a manner they reasonably believed to be in the best interests of Tesla and all of its stockholders.” Tesla hasn’t disclosed the amount Denholm returned.
