Feeds

Zuckerberg and other directors sued over GIGANTIC PACKAGES

Shareholder claims board can award themselves as much money as they like

Security and trust: The backbone of doing business over the internet

A disgruntled shareholder is suing Mark Zuckerberg and other top Facebook execs over what he claims are unreasonably generous payment terms.

Ernesto Espinoza filed with the Delaware Chancery Court on Friday, saying that the way pay was decided at the moment basically left the board free to give itself however much money it wanted.

“[The board] is essentially free to grant itself whatever amount of compensation it chooses,” he complained in his filing.

Facebook is currently following its 2012 equity incentive plan, which caps total awards at 25 million shares and individual awards at 2.5 million, which in theory could let the board award directors up to $157m in stock each, based on Monday’s closing price of $62.88.

Although the board hasn’t paid out that kind of package, Espinosa contends that last year’s average take-home pay of $461,000 to non-employee directors was too much. He said the sum was 43 per cent higher than the typical payout at firms like Amazon and the Walt Disney Company, where revenue was twice as high and profits were triple those of the social network.

The lawsuit is alleging breach of fiduciary duty, waste of corporate assets and unjust enrichment and wants the courts to force the directors to repay Facebook for alleged damages and put “meaningful limits” on how much stock they get, subject to shareholder approval.

Facebook said it was planning to fight the suit.

"The lawsuit is without merit and we will defend ourselves vigorously," Genevieve Grdina told Reuters in an email. ®

New hybrid storage solutions

More from The Register

next story
JINGS! Microsoft Bing called Scots indyref RIGHT!
Redmond sporran metrics get one in the ten ring
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Found inside ISIS terror chap's laptop: CELINE DION tunes
REPORT: Stash of terrorist material found in Syria Dell box
OECD lashes out at tax avoiding globocorps' location-flipping antics
You hear that, Amazon, Google, Microsoft et al?
Show us your Five-Eyes SECRETS says Privacy International
Refusal to disclose GCHQ canteen menus and prices triggers Euro Human Rights Court action
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Security and trust: The backbone of doing business over the internet
Explores the current state of website security and the contributions Symantec is making to help organizations protect critical data and build trust with customers.