Tesla settles one lawsuit, kickstarts another
Tesla resolved a dispute over director pay on Monday, according to court filings made in the US state of Delaware.
The company's directors said they will return $735 million to close claims they overpaid themselves. In addition, the directors agreed not to receive any compensation for the three years from 2021 to 2023 and to change the way board compensation is decided at the electric vehicle maker.
The lawsuit against Tesla's board was launched in 2020 by the Police and Fire Retirement System of the City of Detroit, a retirement fund that holds shares in Tesla, challenging stock options granted to board members from June 2017. The directors, who include Larry Ellison of Oracle, were accused of awarding themselves excessive compensation through the grant of around 11 million stock options over 2017-20.
Tesla had fought the lawsuit, arguing that the stock options were used to align director incentives with investor goals, and pointing out that the company's stock had gained 10-fold, sending up the value of the options but also benefiting investors.
Meanwhile, the Elon Musk-led company filed a lawsuit against Australia's Cap-XX in Texas, claiming its supercapacitors infringe on two of Tesla's US patents, held by a subsidiary. The supercapacitors are used to store energy in batteries of electric vehicles.
Tesla said its action was a response to a 2019 patent infringement lawsuit that Cap-XX filed against its subsidiary.
Musk has pledged not to initiate patent lawsuits against individuals or companies who use Tesla technology in "good faith", and last year opened the Tesla's proprietary charging technology to other EV manufacturers.
The company has since signed deals with carmakers Ford and General Motors as well as EV charging point companies to offer the charging point on their vehicles or at their charging stations, giving it a majority share of the charging technology market and effectively meeting its name, the North American Charging Standard.