U.S. Court Rubber-Stamp $919 million Settlement For Tesla Directors

James Murdoch and Robyn Denholm, the chair of Tesla’s board, secured court approval on Wednesday for a $919 million settlement that calls for them to reimburse the automaker for alleged overpayment.

Denholm and Murdoch, among other Tesla board members, are required by the settlement to return approximately $277 million in cash, $459 million in stock options, and to forego $184 million in stock options for 2021–2023.

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The shareholder who initiated the case filed a court filing stating the settlement was insurance-protected. A shareholder who opposed the deal and a plaintiff’s lawyer said that at a telephonic hearing on Wednesday, Chancellor Kathleen McCormick, the judge presiding over the case, read her decision approving the settlement.

Andrew Dupre, an attorney for the shareholder stated We’re very pleased with the chancellor’s ruling.”.  The settlement was the second-largest, according to the plaintiff’s legal team last year. None of the directors acknowledged any wrongdoing.

Additionally, McCormick granted the three law firms that brought the case on a contingency basis $176 million in fees and costs. Tesla had requested that McCormick set a $64 million cap on the fee. In Delaware’s history of shareholder litigation, the fee ranks the fourth-highest.

The agreement settles a 2020 lawsuit brought by the City of Detroit’s Police and Fire Retirement System, which argued that director compensation from 2017 to 2020 was excessive.

 

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Olumide Adesina
Olumide Adesina
Financial Market Writer
Olumide Adesina is a French-born Nigerian financial writer. He tracks, analyzes, and reports changes in financial markets with over 15 years of working experience in investment trading.
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