https://www.engadget.com/tesla-directors-agree-to-return-735-million-following-claims-they-were-massively-overpaid-105506056.html

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Tesla directors agree to return $735 million following claims they
were massively overpaid

In a lawsuit, shareholders claimed they were massively overpaying
themselves.

FILE - A sign marks the entrance to the Tesla Gigafactory, Oct. 13,
2018, in Sparks, Nev. Tesla will get more than $330 million in tax
breaks from Nevada to massively expand its vehicle battery facility
east of Reno and add a new electric semi-truck factory. Approval on
Thursday, March 2, 2023, from the Governor's Office of Economic
Development came as Republican Gov. Joe Lombardo cited the benefit of
jobs and the boost that Tesla's huge Gigafactory has given the local
economy for almost a decade. (AP Photo/John Locher, File)
ASSOCIATED PRESS
Steve Dent
Steve Dent|@stevetdent|July 18, 2023 6:55 AM

Elon Musk, Larry Ellison and other current and former members of
Tesla's board of directors will return $735 million to settle claims
that they massively overpaid themselves, Reuters has reported. The
deal wraps up a saga that started in 2020 stemming from a lawsuit
filed by a police and firefighter retirement fund challenging stock
options granted to Tesla's board starting in 2017. Directors also
agreed not to receive compensation for 2021, 2022 and 2023, and
change the way compensation is calculated. 

Tesla's current board includes Elon Musk, his brother Kimbal, Fox
News mogul James Murdoch, Airbnb co-founder Joe Gebbia and former
Tesla CTO JB Straubel. The case is separate from a lawsuit filed by
shareholders against a $56 billion compensation package awarded to
CEO Elon Musk.

The Police and Fire Retirement System of the City of Detroit accused
Tesla's board of giving itself unfair and excessive compensation in
the form of 11 million stock options between 2017 and 2020, saying it
grossly exceeded norms for a corporate board. The $735 million
settlement will be paid back to Tesla in what's called a "derivative
lawsuit" -- the largest ever awarded by Delaware's Court of Chancerty,
according to Reuters. 

Tesla argued that stock options were used to ensure Director's
incentives were aligned with investor goals. Tesla has yet to comment
on the affair, but in court documents, said that it agreed to settle
to eliminate the risk of future litigation. 
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Tesla CEO Elon Musk is fighting a separate lawsuit to defend his $56
billion pay package. It was brought by shareholder Richard Tornette,
who claimed that "the largest compensation grant in human history"
was given to Musk, even though he didn't focus entirely on Tesla. In
2020, he received the first of 12 $700 million payments as part of
that package. 

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