Accused of 'Unrelenting' Greed, Tesla Board Relents

12 directors, including Elon Musk's brother, will return a total of $735M
By John Johnson,  Newser Staff
Posted Jul 18, 2023 1:23 PM CDT
Tesla Board: OK, We'll Return $735M We Paid Ourselves
A sign bearing the company logo outside a Tesla store in Cherry Creek Mall in Denver.   (AP Photo/David Zalubowski, File)

It pays to be on the board of Tesla, but one shareholder has successfully made the case that it paid way too much. The company's 12 directors have agreed to settle a lawsuit by returning $735 million to the company, reports Quartz. It's one of the largest shareholder settlements of its kind, notes Reuters. The 2020 lawsuit, brought by the pension fund for police officers and firefighters in Detroit, accused the directors of "unrelenting avarice" because they had awarded themselves so many stock options since 2017. Those directors include some familiar names, including Oracle founder Larry Ellison, James Murdoch (son of Rupert), and Kimbal Musk (brother of you-know-who).

The board admitted no wrongdoing but agreed to settle "to eliminate the uncertainty, risk, burden, and expense of further litigation," according to a court filing. Tesla has previously argued that the payments were justified because the company was doing so well, and that the stock options gave the board extra incentive to make sure it kept doing well. The settlement has no bearing on a separate lawsuit in the works, one brought by shareholders who say Elon Musk's compensation package of $56 billion is outrageously high, according to CNN. (Read more Tesla stories.)

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