Robyn Denholm, who has chaired the board since 2018, earned $168 million in the past year by exercising her stock options. And she sold $43 million in stock last week.
Tesla Chairman Robyn Denholm has done very well in the past year, most notably by selling most of her shares in the company. She dumped 65% of her stock and options in the last 12 months, netting $ 168 million before taxes. That was partly due to the stock’s surge following Donald Trump’s election victory in November.
Why Robyn Denholm Sold So Many Stocks
Denholm, who has led Tesla since the Securities and Exchange Commission forced Elon Musk out of the position in 2018 over false tweets about raising capital to take the company off the stock exchange, has retained just 85,000 shares and 412,000 options after selling $43 million in stock this month, according to SEC filings. A year ago, that figure was much higher: 15,000 shares and 1.47 million options. One likely reason for his heavy selling: His options expire in June, so he will likely continue selling many of his remaining options in the coming months. Since 2017, he has sold $448 million in pre-tax Tesla shares .
“Board members are paid in stock, and it’s really scary to have all your wealth in the assets of one company. So it’s perfectly understandable that executives and board members would sell a little bit of stock when they have the opportunity,” said UCLA professor Andrew Verstein, co-director of its Lowell Milken Institute for Business Law and Policy. “On the other hand, it’s a little scary because these people know how the company is going to do, and if they sell, it can be a bad sign .”
The maxi-refund in sight
Most of Denholm’s sales were under a plan set to expire in July 2024 — she has exercised and sold more than 403,000 options since then. So while the overall reduction in her shares is steep, it’s not entirely surprising. She, Musk and the other six board members also must repay $919 million to the company under a settlement approved by the Delaware Court of Chancery last month that found they overpaid themselves between 2017 and 2020. As a group, the board must return $277 million in cash and more than $450 million in stock options, and it must forfeit options for 2021-2023.
The agreement does not contain details about Denholm’s specific share of the reimbursement. Since Musk owns 12% of Tesla, it is likely that he will receive the majority of the reimbursement.
Denholm did not immediately respond to a request for comment on his stock sale. Tesla shares rose 5.8% to $355.94 on Thursday, Feb. 13.
How much is Tesla worth?
With a market capitalization of $1.1 trillion , Tesla is by far the most valuable car company in the world. Its stock has always been very volatile, since its listing in 2010. Until now, Musk’s close ties with Trump, strengthened by the more than $200 million that the South African billionaire has poured into the president’s 2024 campaign, have brought great benefits to Tesla. The shares began to rise following Trump’s victory over former Vice President Kamala Harris, in November, until reaching an all-time high of $479.86 on December 17. Investors were convinced that the new administration would adopt policies very favorable to Musk’s companies, which had faced inquiries and investigations by regulatory authorities during Biden’s presidency. The $400 million contract signed by the State Department for the purchase of armored electric vehicles, initially identified as Tesla, had seemed like an initial bonus for the company, although the deal is now on hold.
Denholm, who is Australian and joined Tesla’s board in 2014, is also a partner at Blackbird Ventures, which operates in Australia and New Zealand, and was the CFO of Australian telecommunications company Telstra Corp. She wasn’t the only board member to sell a large chunk of her shares in the past year.
What does the rest of the board of directors do?
Kathleen Wilson-Thompson , who was the head of human resources at Walgreens Boots Alliance and joined Tesla’s board in November 2018, sold $106.5 million in stock and options, dumping most of her stake in the company. As of last month, she had options on 120,948 shares, down from 765,855 a year ago.
Tesla board members, including Elon Musk’s brother Kimbal Musk , who owns 1.46 million shares, and James Murdoch , have been among those who have benefited most from the stock’s rise, especially since the company became highly profitable in 2020 following the opening of its Shanghai Gigafactory. But that adds to concerns over a lack of moderation over Musk’s increasingly controversial comments and brand-threatening actions, a problem that has become even more pressing now that he leads Doge , Trump’s so-called Department of Government Efficiency, which is tasked with cutting the federal budget despite questions about the legality of the move.
“Tesla is a successful company by any measure, even if some aspects of it seem problematic by traditional standards of good corporate governance or what the Delaware courts would like to see,” Vernstein said. “Tesla seems to have convinced itself that it can do just fine without following all the procedures and without worrying about making a bad impression. Can you run a company that is very ambitious and doesn’t follow any of the so-called best practices if your idea is good enough, if your CEO is charismatic enough, if your engineering is good enough? Can you ignore all the fluff and get investors and consumers to agree? And if that pisses off some judges and law professors, so be it.”