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Tesla’s board agree to return $735 million on claims they were overpaid

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Tesla’s board of directors will return $735 million to the company to settle a lawsuit alleging overpayment. This total includes $458.6 million in shares and $276.6 million in cash. 

According to court records, the board of directors, which includes Oracle co-founder Larry Ellison, Rupert Murdoch’s son James Murdoch, and Elon Musk’s brother Kimbal Musk, stated that they will refund stock and cash earned on exercised options from 2021 to this year.

As part of the settlement, the directors denied wrongdoing and stated that they consented to the deal to “eliminate the uncertainty, risk, burden, and expense of further litigation,” according to the document. They had previously justified the large dividends by arguing that the company had tremendous growth, which caused the stock to skyrocket. Tesla shares have increased 1,795% in the last five and a half years.

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Interestingly, the proposed deal excludes Elon Musk, who is undergoing a separate lawsuit on his $56 billion pay as Tesla CEO, Reuters reported. 

The $735 million settlement is the result of a 2020 lawsuit in which Detroit’s Police and Fire Retirement System, a Tesla shareholder, accused the board members of overpaying themselves in stock options from 2017 to 2020. The settlement is now seeking approval from the Chief Judge of the Delaware Chancery Court. 

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Dennis Mathu
Dennis Mathu
I cover motoring news, gadgets, software releases, mobile apps and enterprise systems powering corporations. Contact me at [email protected] or [email protected]

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