SYDNEY: Billionaire entrepreneur Elon Musk is drawing political flak as he champions right-wing causes in Europe and leads President Donald Trump’s slashing of the US federal workforce. The controversy is pummeling sales at Tesla, the electric-vehicle giant Musk runs. Its stock has plunged – down 15 percent on March 10 alone – and investors are yelping in pain.
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 US. 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. 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 US 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 percent 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. - Reuters