Tesla directors agree to return $735 million in stock: landmark settlement
In a landmark decision, Tesla Inc. TSLA directors, including co-founder Elon Musk, have agreed to return more than $735 million in stock to settle a lawsuit against them of having unduly granted himself heavy remuneration.
The decision is seen as an important step in addressing investor concerns about corporate governance practices at Tesla.
Tesla stock closed up 3.2% on Monday, hitting highs not seen since September 23, 2022.
Chart: Tesla stock price rises to $290, reaching end-September 2022 levelsThe directors, which include Larry Ellison, co-founder of Oracle Corp. ORCL; James Murdoch, son of media mogul Rupert Murdoch and Musk's brother Kimbal Musk, has agreed to return stock awards and revise how compensation issues at the board level are reviewed. Although they denied any wrongdoing, the administrators opted to settle the case to avoid the uncertainty and expense of further litigation, Bloomberg reports.
Also read: Tesla prepares to double size of Berlin plant, aiming for 1 million electric vehicles per year< /p> The trial
The lawsuit was filed by the Police and Fire Retirement System of Detroit in 2020, accusing directors of awarding themselves excessive compensation in the form of approximately 11 million stock options. purchase of shares from 2017 to 2020. The settlement, which is one of the largest on record for a derivative case in the Court of Chancery, will be paid to Tesla for the benefit of the company.
Impact on Tesla's governanceAs part of the settlement, directors have agreed to receive no compensation for 2021, 2022 and 2023. In addition, the board will change the way compensation is determined. The move came after Tesla defended the lawsuit arguing that the company's unprecedented growth, which led to a 10-fold increase in the company's share price, justified the increase in stock options. granted to the administrators and to Musk.
Read Now: Tesla's Aggressive Price Cuts Show Potential Long-Term Gains: Analyst
This content was partially produced using artificial intelligence tools and has been reviewed and published by Benzinga editors.< /em>
Photo: Shutterstock
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
In a landmark decision, Tesla Inc. TSLA directors, including co-founder Elon Musk, have agreed to return more than $735 million in stock to settle a lawsuit against them of having unduly granted himself heavy remuneration.
The decision is seen as an important step in addressing investor concerns about corporate governance practices at Tesla.
Tesla stock closed up 3.2% on Monday, hitting highs not seen since September 23, 2022.
Chart: Tesla stock price rises to $290, reaching end-September 2022 levelsThe directors, which include Larry Ellison, co-founder of Oracle Corp. ORCL; James Murdoch, son of media mogul Rupert Murdoch and Musk's brother Kimbal Musk, has agreed to return stock awards and revise how compensation issues at the board level are reviewed. Although they denied any wrongdoing, the administrators opted to settle the case to avoid the uncertainty and expense of further litigation, Bloomberg reports.
Also read: Tesla prepares to double size of Berlin plant, aiming for 1 million electric vehicles per year< /p> The trial
The lawsuit was filed by the Police and Fire Retirement System of Detroit in 2020, accusing directors of awarding themselves excessive compensation in the form of approximately 11 million stock options. purchase of shares from 2017 to 2020. The settlement, which is one of the largest on record for a derivative case in the Court of Chancery, will be paid to Tesla for the benefit of the company.
Impact on Tesla's governanceAs part of the settlement, directors have agreed to receive no compensation for 2021, 2022 and 2023. In addition, the board will change the way compensation is determined. The move came after Tesla defended the lawsuit arguing that the company's unprecedented growth, which led to a 10-fold increase in the company's share price, justified the increase in stock options. granted to the administrators and to Musk.
Read Now: Tesla's Aggressive Price Cuts Show Potential Long-Term Gains: Analyst
This content was partially produced using artificial intelligence tools and has been reviewed and published by Benzinga editors.< /em>
Photo: Shutterstock
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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