Tesla directors to return more than $735 million to company to settle suit challenging compensation
Current and former directors of Tesla Inc. have agreed to return more than $735 million to the electric-vehicle maker to settle a shareholder lawsuit alleging that they unjustly enriched themselves with excessive compensation
DOVER, Del. — DOVER, Del. (AP) —
Current and former directors of electric-vehicle maker Tesla Inc. have agreed to return more than $735 million to the company to settle a shareholder lawsuit alleging that they unjustly enriched themselves with excessive compensation.
The proposed settlement was outlined in documents filed late Friday in the Delaware Court of Chancery and is subject to court approval. The settlement does not include claims involving any other Tesla shareholder suit, including a separate Chancery Court action challenging a compensation package awarded to CEO Elon Musk in 2018 that is potentially worth more than $55 billion. A ruling in that case is expected in the very near future.
The settlement agreement involves a derivative lawsuit filed on behalf of the company in 2020 by the Police and Fire Retirement System of the City of Detroit, a retirement fund that invested in Tesla and challenged stock options granted to company directors starting in June 2017.
The settlement agreement calls for the director defendants, including Oracle co-founder and former Tesla board member Larry Ellison, to provide Tesla with the value of more than 3.1 million stock options, in the form of returned cash, returned stock and unexercised stock options. The total value is based on a settlement stock price of $260.54, which was Tesla’s closing share price on June 16. According to the court filing, the parties accepted a settlement recommendation from a mediator on June 20.
The valuation methods used in
Read more on abcnews.go.com
