Tesla’s administrators will return $735 million to the corporate to settle claims from shareholders that they excessively overpaid themselves, in keeping with a Monday courtroom submitting.

The settlement concludes a 2020 lawsuit from a retirement fund that holds Tesla inventory. The Police and Hearth Retirement System of the Metropolis of Detroit had criticized inventory choices granted to Tesla administrators — together with CEO Elon Musk, his brother Kimbal Musk and Oracle co-founder Larry Ellison — beginning in June 2017.

Musk can be individually beneath scrutiny for his personal $56 billion compensation bundle, which is dealing with its personal lawsuit that went to trial final 12 months. Shareholder Richard Tornetta filed go well with in opposition to Tesla in 2019 to rescind Musk’s 2018 pay deal. Tornetta claims the bundle is “the biggest compensation grant in human historical past” and it’s unjustly paid to Musk — whom he known as a “part-time CEO” — with out demanding that the manager focus solely on Tesla.

A ruling is quickly anticipated on Musk’s case.

Tesla’s administrators had been accused of awarding themselves round 11 million inventory choices from 2017 to 2020, which shareholders say is grossly in extra of the usual for company boards. They agreed to return the equal worth of three.1 million Tesla inventory choices, the submitting reveals and Reuters studies.

Tesla argued that its administrators acted in good religion and in the most effective pursuits of Tesla stockholders, however settled to keep away from threat of litigation in opposition to themselves and the corporate. The EV maker defended itself by saying the corporate went by means of unprecedented development, which shot Tesla’s inventory value up 10x, which induced the inventory choices award to administrators and Musk to rise in worth. The corporate stated it used inventory choices to make sure the administrators’ incentives lined up with investor targets.

As a part of the deal, the administrators additionally agreed to not obtain compensation for 2021, 2022 and 2023. The board may also have to vary the best way compensation is decided — one thing to look out for on the subsequent shareholder assembly.

The settlement, one of many largest ever for the same case within the Courtroom of Chancery, can be paid on to Tesla to learn the corporate.