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|11th June 2014, 07:54||#1|
Join Date: May 2010
Facebook board sued over pay
Mark Zuckerberg and other members of Facebook board have been sued by a shareholder who is furious that they can collect $150 million of stock each.
Ernesto Espinoza said the board was "essentially free to grant itself whatever amount of compensation it chooses" under the social media company's 2012 equity incentive plan, which also covers employees, officers and consultants.
The plan annually caps total awards at 25 million shares and individual awards at 2.5 million, and in theory lets the board annually award directors $156 million in stock each.
Espinoza added that last year's average $461,000 payout to non-employee directors was too high, being 43 percent larger than typical payouts at "peer" companies such as Amazon.com and Walt Disney that on average generated twice as much revenue and three times more profit.
The lawsuit alleges breach of fiduciary duty, waste of corporate assets and unjust enrichment.
It seeks to force directors to repay Facebook for alleged damages sustained by the Menlo Park, California-based company, and to impose "meaningful limits" subject to shareholder approval about how much stock the board can award itself.
Facebook Chief Operating Officer Sheryl Sandberg, a director whose compensation was $16.15 million in 2013, is also in the dock, along with Zuckerberg who made $653,165 last year.
Espinoza has a history of getting miffed with companies he has invested in. He was a plaintiff in a 2010 shareholder case in Delaware against HP concerning its handling of the resignation of Chief Executive Mark Hurd over his alleged sexual harassment of a former soft-porn star turned contractor.
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