FILE - A sign bearing the Tesla company logo is displayed outside a Tesla store in Cherry Creek Mall in Denver, Feb. 9, 2019. Current and former directors of electric-vehicle maker Tesla Inc. have agreed to return more than $735 million to the company to settle a shareholder lawsuit alleging that they unjustly enriched themselves with excessive compensation.
The settlement agreement involves a derivative lawsuit filed on behalf of the company in 2020 by the Police and Fire Retirement System of the City of Detroit, a retirement fund that invested in Tesla and challenged stock options granted to company directors starting in June 2017. The valuation methods used in the settlement stipulation result in an overall settlement value of $735,266,505, consisting of $458,649,785 in returned options and $276,616,720 in returned cash or returned stock. Any fees awarded to plaintiffs’ attorneys would be deducted from the settlement amount and would reduce the amount of consideration paid to the company.
In agreeing to the settlement, the defendants denied any wrongdoing or liability, including any allegation that they breached any duty owed to the company.