Tesla directors agree to return $735M in stock options
Tesla directors have agreed to return $735 million in stock options to settle a lawsuit filed by shareholders
who accused them of grossly overpaying themselves. The settlement, which was filed in a Delaware court on Monday, is one of the largest ever for a derivative case in the court of chancery.
The lawsuit was filed in 2020 by the Police and Fire Retirement System of the City of Detroit, which holds Tesla stock. The lawsuit alleged that the directors had awarded themselves unfair and excessive compensation in the form of around 11 million stock options from 2017 to 2020. The options were granted at a time when Tesla's stock price was rising rapidly, and the lawsuit alleged that the directors had taken advantage of this to enrich themselves.
The directors, who include Oracle co-founder Larry Ellison, agreed to return the equivalent value of 3.1 million Tesla stock options as part of the settlement. They also agreed to not receive any compensation for 2021, 2022, and 2023. In addition, the board of directors has agreed to change the way compensation is determined in the future.
The settlement is a victory for shareholders, who had been seeking to hold the directors accountable for their actions. It is also a reminder that even the most powerful companies are not immune to shareholder lawsuits.
Here are some additional details about the settlement:
- The settlement was reached after mediation.
- The directors did not admit any wrongdoing as part of the settlement.
- The settlement is expected to be finalized in the next few weeks.
The settlement is a significant development for Tesla, and it will be interesting to see how it affects the company's future. It is possible that the settlement could lead to changes in the way Tesla compensates its directors, and it could also make it more difficult for the company to attract and retain top talent. However, it is also possible that the settlement will have little impact on Tesla, and that the company will continue to grow and succeed. Only time will tell how the settlement will ultimately affect Tesla.
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