Feeds

Zuckerberg and other directors sued over GIGANTIC PACKAGES

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

Secure remote control for conventional and virtual desktops

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. ®

Beginner's guide to SSL certificates

More from The Register

next story
Facebook pays INFINITELY MORE UK corp tax than in 2012
Thanks for the £3k, Zuck. Doh! you're IN CREDIT. Guess not
Big Content outs piracy hotbeds: São Paulo, Beijing ... TORONTO?
MPAA calls Canadians a bunch of bootlegging movie thieves
Google Glassholes are UNDATEABLE – HP exec
You need an emotional connection, says touchy-feely MD... We can do that
Just don't blame Bono! Apple iTunes music sales PLUMMET
Cupertino revenue hit by cheapo downloads, says report
US court SHUTS DOWN 'scammers posing as Microsoft, Facebook support staff'
Netizens allegedly duped into paying for bogus tech advice
Feds seek potential 'second Snowden' gov doc leaker – report
Hang on, Ed wasn't here when we compiled THIS document
Verizon bankrolls tech news site, bans tech's biggest stories
No agenda here. Just don't ever mention Net neutrality or spying, ok?
prev story

Whitepapers

Choosing cloud Backup services
Demystify how you can address your data protection needs in your small- to medium-sized business and select the best online backup service to meet your needs.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
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?
New hybrid storage solutions
Tackling data challenges through emerging hybrid storage solutions that enable optimum database performance whilst managing costs and increasingly large data stores.
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.