Executives at US electric carmaker Tesla have agreed to settle a lawsuit challenging their compensation. As part of the agreement, they will return to the company $735 million that they received as bonuses in the form of stock options. Reuters reported today, citing court documents.
The lawsuit
The lawsuit was filed in 2020 by a pension fund that owns Tesla stock. According to the lawsuit, the executives awarded themselves unfair and excessive bonuses in the form of stock options between 2017 and 2020.
The agreement to settle the lawsuit does not cover the record $56 billion compensation plan the company awarded to its CEO Elon Musk in 2018. That plan is the target of a separate lawsuit filed by a shareholder. The trial in the case began last year and a verdict is expected soon, Reuters reports.
Terms too easy
Musk’s compensation plan is spread over multiple parts and multiple years. The receipt of individual awards in the form of stock options is conditional on meeting performance targets, including certain profitability of the company and its stock price on the stock market. According to the claim, the conditions for the awards were too easy to set.
Tesla is the world’s largest manufacturer of electric cars. It delivered a record 466,140 vehicles to customers in this year’s second quarter, an 83 percent increase year-over-year.
Musk, who bought Twitter for $44 billion last year, is now the richest man in the world. According to the billionaires index compiled by Bloomberg, his current wealth is worth $248 billion.
Source: ČTK
