Tesla Directors Settle $919 Million Compensation Claims

A Delaware judge has approved a settlement requiring Tesla directors, including Chair Robyn Denholm and James Murdoch, to return up to $919 million to the company due to excessive compensation claims from 2017 to 2020. The settlement, stemming from a 2020 lawsuit by the Police and Fire Retirement System of the City of Detroit, mandates the directors to return approximately $277 million in cash, $459 million in stock options, and forgo an additional $184 million in stock options for 2021-2023. Chancellor Kathaleen McCormick, who presided over the case, also awarded $176 million in fees to the plaintiffs' law firms, marking it as the second-largest settlement in Delaware Chancery Court history. Although the directors did not admit wrongdoing, the settlement includes governance reforms requiring shareholder approval for future compensation. This resolution highlights efforts to protect shareholder interests and concludes a lengthy legal battle over executive compensation at Tesla. Separately, former MoviePass executives are facing legal consequences for securities fraud, with one potentially facing up to 25 years in prison.