The Delaware Supreme Court has reduced Tesla’s legal fees to $70.9 million from $176.1 million in a shareholder lawsuit over director compensation.
The court said a lower court judge had overestimated the value of the settlement when calculating attorney fees.
The case was brought by lawyers representing the Detroit firefighter and police pension fund, which accused Tesla’s board of excessive self-compensation.
Reacting on X, Elon Musk said the ruling was “saving the state.”
As part of the settlement, Tesla directors, including Chair Robyn Denholm and James Murdoch, agreed to return about $277 million in cash and stock options. Shareholder attorneys estimate the total settlement value at $919 million.
The decision comes amid growing scrutiny over large legal fee awards in Delaware, following a $267 million fee ruling in a 2024 Dell Technologies case. The state’s bar association is now preparing recommendations for possible reforms.
The Supreme Court also said the intrinsic value of returned stock options should not have been included in settlement calculations.
Musk was not part of the settlement and separately defended his own compensation after the court overturned a 2024 ruling that had voided his 2018 Tesla pay package.