WILMINGTON, Del., Jan 8 (Reuters) - Tesla directors

including Chair Robyn Denholm and James Murdoch got court

approval on Wednesday for a settlement worth up to $919 million

that requires they return compensation to the carmaker to

resolve allegations they overpaid themselves.

The settlement requires Tesla board members including

Denholm and Murdoch to return roughly $277 million in cash, $459

million in stock options and to forgo stock options for 2021-23

worth $184 million. The settlement was not covered by insurance,

according to a court filing by the shareholder who brought the

case.

Chancellor Kathaleen McCormick, the judge overseeing the

case, read her ruling approving the settlement at a telephonic

hearing on Wednesday, according to an attorney for the

plaintiffs and a shareholder who objected to the deal.

"We're very pleased with the chancellor's ruling,"

Andrew Dupre, an attorney for the shareholders, told Reuters.

The plaintiff's legal team said last year the settlement was

the second-largest ever in Delaware's Court of Chancery, the

go-to forum for shareholder litigation.

The directors did not admit wrongdoing.

McCormick also awarded $176 million in fees and costs to the

three law firms that brought the case on a contingency basis.

Tesla had asked McCormick

to cap the fee

at $64 million.

The fee is the fourth-largest in the history of

shareholder litigation in Delaware.

The company and its attorney did not immediately respond

to a request for comment.

The settlement resolves a 2020 lawsuit by the Police and

Fire Retirement System of the City of Detroit which challenged

director compensation from 2017 to 2020 as excessive.

The Tesla directors received stock options that became worth

hundreds of millions of dollars as the value of Tesla stock

surged 10 times over that period.

By comparison, the average total compensation for directors

at S&P 500 companies is $327,096 in 2024, according to

SpencerStuart, a consulting group that conducts executive

searches.

Musk did not receive compensation for his role as a

Tesla board member.

However, a Tesla shareholder filed a separate lawsuit in

2018 challenging Musk's $56 billion pay for serving as Tesla's

CEO. Last year, the same judge ordered Musk's pay package be

rescinded because Musk controlled the pay negotiations. One of

the factors the judge considered was the amount of wealth that

directors owed to Musk or Tesla.

Denholm, for example, testified in that case that her board

tenure at Tesla netted her around $280 million, which she

described as "life-changing wealth."

The other directors named in the lawsuit included Musk's

brother Kimbal, Brad Buss, Ira Ehrenpreis, Antonio Gracias,

Stephen Jurvetson, Linda Johnson Rice, Kathleen Wilson-Thompson,

Hiromichi Mizuno and the co-founder of Oracle Corp, Lawrence

Ellison. Forbes lists Ellison as one of the richest people in

the world with a fortune estimated at $206 billion.

The settlement does not spell out how much each director has

to return, just a collective amount.

The settlement also included governance changes such as

requiring shareholder approval for director compensation.