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Tesla Board Members to Repay $735 Million Following Lawsuit Alleging Excessive Compensation

Tesla’s board members have agreed to return over $700 million to the company following allegations of excessive pay, making it one of the largest settlements in corporate history, as reported by Reuters.

The settlement, filed in the Delaware Chancery Court on Monday, reveals that the board members have reached a deal to repay $735 million to the electric vehicle company, including $3.1 million in stock options. Furthermore, the directors have also committed to implementing changes to how board member compensation is evaluated, according to Bloomberg Law.

This agreement concludes a 2020 lawsuit that claimed Tesla’s directors had breached their fiduciary duties by granting themselves excessive and unfair compensation. The filing reveals that the directors, including Tesla CEO Elon Musk, Larry Ellison, the co-founder of Oracle Corp., and Kimbal Musk, Elon Musk’s brother, awarded themselves approximately $11 million worth of stock options between 2017 and 2020, as reported by Reuters.

Tesla stock plummets as Elon Musk considers slashing prices on some vehicles


The directors defended their actions during the lawsuit but ultimately decided to settle in order to eliminate the uncertainty, risk, burden, and expense of further litigation, as stated in a filing on July 14 cited by Bloomberg Law.

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