Tesla shareholders threw their weight behind CEO Elon Musk on Thursday, approving a controversial 10-year compensation plan valued at a staggering $44.9 billion. This dwarfs the typical pay package for CEOs of major US companies, raising questions about executive compensation and corporate governance.
For context, the median CEO compensation for the largest publicly traded US corporations in 2023 was roughly 200 times that of their median employee, according to the Associated Press. Even among this group of highly-paid executives, Musk’s plan stands out.
Here’s a glimpse into the landscape of CEO pay:
Hock Tan, CEO of Broadcom, received the highest reported compensation in 2023. His initial package of $162 million ballooned to a whopping $767.7 million due to a surge in Broadcom’s stock price.
Other top earners included William Lansing (Fair Isaac), Tim Cook (Apple), Hamid Moghadam (Prologis), and Ted Sarandos (Netflix) with compensation packages ranging from $49.8 million to $66.3 million.
The median pay package for an S&P 500 CEO in 2023 was a significantly lower $16.3 million, according to Equilar data cited by the AP.
However, despite the shareholder vote, Musk’s record-breaking compensation plan faces legal challenges. A Delaware judge previously threw out the plan, citing concerns about the process used for its approval and a lack of transparency for shareholders. This means the legal battle is far from over.
Here are the key takeaways:
Tesla shareholders approved a massive pay package for Elon Musk.
This compensation dwarfs the average CEO pay in the US.
The legality of the plan remains in question due to a court case.
This situation has reignited discussions about executive compensation and the power dynamics between CEOs and shareholders. While some argue that these high-powered individuals deserve significant rewards for driving company growth, others express concerns about excessive pay and a lack of accountability. As the legal battle unfolds, it will be interesting to see if Tesla and Musk can successfully defend the compensation plan.