Tesla Inc (NASDAQ:TSLA) directors, including chief executive Elon Musk, have been forced to return US$735mln of cash and stock options back to the company to settle a lawsuit claiming they paid themselves way too much.
The legal defeat is said to be of the largest settlements of its kind, though a separate battle continues over Musk's individual US$56bn bonus package.
According to filings at the Delaware Chancery Court, directors handing back their compensation spoils include Larry Ellison, founder of Oracle; James Murdoch, son of Rupert Murdoch; and Kimbal Musk, brother of Elon.
The case, which was filed in 2020 by a pension fund based in Michigan, covers stock options granted to Tesla directors from June 2017 and also requires Tesla to make corporate governance changes to the way board-level compensation issues are reviewed.
Tesla's directors denied wrongdoing, but agreed to settle the case “to eliminate the uncertainty, risk, burden, and expense of further litigation”.
A ruling on Musk's US$56bn package, which went to trial last year, is expected soon.