July 19, 2023
A group of Tesla directors, including CEO Elon Musk, have agreed to return $735 million to the company to settle a lawsuit alleging they overpaid themselves.
The lawsuit, filed by a police and firefighter retirement fund, accused the directors of granting themselves excessive stock options between 2017 and 2020. The settlement is the largest ever awarded by Delaware’s Court of Chancery in a derivative lawsuit.
The directors have also voluntarily forgone any compensation for the years 2021, 2022, and 2023. They have also undertaken to revise the method of calculating their future remuneration. With current and former luminaries on Tesla’s board, including Elon Musk, Kimbal Musk, James Murdoch, Joe Gebbia, and JB Straubel, this development marks a noteworthy chapter in the company’s corporate governance.
Tesla said in court documents that it agreed to settle to eliminate the risk of future litigation.
The sources for this piece include an article in Engadget.
