Archive · 20 Nov 2025
Tesla's $26B Problem: Musk's 2018 Pay Package Threatens Future Profits
Tesla might have to pay $26 billion because of a big pay package given to Elon Musk in 2018.
This is more than half of the money Tesla has made since it started making a profit.
Even if they don't have to pay this money, another big pay package could still hurt Tesla's profits in the future.
Some people think Tesla's board of directors is not being careful with how they give out money to the CEO.
Even though Tesla's stock price is very high right now, it's mostly because people believe in Elon Musk's plans for the future, not because of how much money the company makes now.
Tesla's 2018 CEO compensation package for Elon Musk could cost the company $26 billion over two years if a court ruling stands.
This amount equals more than half of Tesla's total net income since becoming profitable in 2019.
Even if Tesla wins the appeal, Musk's new $1 trillion pay package could squeeze profits over the next decade.
Critics argue Tesla's board is not following 'reasonable fiduciary practices' by approving such a large compensation package.
Tesla's stock market value is largely based on Musk's promises of future products, not current financials.
- Who
- Tesla, Elon Musk
- What
- Potential $26 billion hit to profits due to CEO compensation package
- When
- If Delaware Supreme Court rules against Tesla's appeal
- Where
- Tesla's balance sheet
- Why
- To replace Musk's 2018 compensation package at today's higher stock price
Critics of Musk's compensation
Tesla's board and Elon Musk
Musk's compensation
Critics of Musk's compensation
Excessively large and risks future profits
Tesla's board and Elon Musk
Tied to ambitious performance goals and benefits shareholders if achieved
- Tesla's total net income since 2019
- Over $40 billion
- Tesla's stock market value
- Based largely on Musk's future promises
