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Jun 2, 2025  |  
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Vaughn Cockayne


NextImg:Delaware judge approves $919 million settlement in Tesla directors lawsuit

A Delaware judge on Wednesday approved a settlement in a lawsuit that will see Tesla directors give over $900 million back to the company.

According to the terms of the settlement, several Tesla directors agreed to return $919 million they originally received as compensation. The settlement resolves allegations that the directors received excessive payment, though the directors have admitted no wrongdoing.

Most of the payment will be made with stock options, with the settlement requiring the directors to pay back $735 million in stock and forgo three years of pay.



Directors named in the settlement include Larry Ellison, Kimbal Musk, James Murdoch and Robyn Denholm.

The settlement also compensates the lawyers representing the law firms of the plaintiffs in the case, awarding $176 million in fees despite attempts by the defendants to cap fees at $64 million.

The suit was originally brought by the Police & Fire Retirement System of the City of Detroit in 2020. The plaintiffs alleged that compensation awarded to Tesla directors between 2017-20 was “excessive.”

Delaware Chancery Judge Kathaleen McCormick, who oversaw the suit, is the same judge who has twice denied Tesla CEO Elon Musk’s $56 billion pay package. The ruling outraged Mr. Musk and some Tesla investors, and he has said he would move the electric vehicle manufacturer’s incorporation out of Delaware.

• Vaughn Cockayne can be reached at vcockayne@washingtontimes.com.