Tesla's board of directors will return $735 million on claims they were overpaid

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Tesla directors are returning $735 million to the company to settle a suit that claims they were overpaid.
That includes $458.6 million in company shares and $276.6 million in cash, per court filings.
The settlement excludes Elon Musk, who is undergoing a separate suit for his $56 billion compensation.

Tesla’s board of directors will return $735 million to the company, in order to settle a lawsuit that claims they were overpaid.

The team of directors – which includes Oracle co-founder Larry Ellison, Rupert Murdoch’s son James Murdoch, and Elon Musk’s brother Kimbal Musk – said they would return stock and cash made on exercised options from 2021 through this year, according to court filings.

That totals to around $735 million, consisting of $458.6 million in company shares and $276.6 million in cash.

The directors denied wrongdoing as part of the settlement and said they agreed to the deal to “eliminate the uncertainty, risk, burden, and expense of further litigation,” the filing reads. 

The settlement is awaiting approval from Delaware Chancery Court’s chief judge. The proposed deal excludes Elon Musk, who is undergoing a separate lawsuit on his $56 billion pay as Tesla CEO, Reuters reported.

The $735 million settlement stems from a 2020 lawsuit, wherein Detroit’s Police and Fire Retirement System accused Tesla’s board members of overpaying themselves in the form of stock options from 2017 to 2020.

Tesla directors denied those claims, arguing that the company saw rapid growth sent the stock soaring. In the last five-and-a-half years, Tesla shares have zoomed 1,795%.