Tesla directors to pay up to $919 million to settle claims they overpaid themselves

A Delaware judge has approved a settlement that will see Tesla directors – including Chair Robyn Denholm, Oracle founder Larry Ellison, Kimbal Musk, and James Murdoch – return up to $919 million to the automaker, officially resolving allegations that they overpaid themselves, per Reuters. 

The settlement concludes a 2020 lawsuit by the Police and Fire Retirement System of the City of Detroit that challenged director compensation from 2017 to 2020 as excessive. The directors will have to pay back stock and options worth up to $735 million and forgo three years of pay allegedly worth $184 million. 

Chancellor Kathaleen McCormick, the judge overseeing the case, also awarded $176 million in fees and costs to the three law firms that brought the case to court on a contingency basis, meaning they would only be paid if they won. Tesla has asked McCormick to cap the fee at $64 million.   

McCormick is the same judge who ruled against Tesla CEO Elon Musk’s exorbitant pay package despite shareholders voting to “re-ratify” the deal.