Facebook, Zuckerberg Sued Over Directors’ Compensation
Facebook Inc. (FB) and Chairman Mark Zuckerberg’s program of letting company directors set their own pay, capped at stock currently worth $145 million per person, wastes corporate assets, an investor said in a lawsuit.
Facebook’s board paid non-employee directors an average of $461,000 last year in stock, exceeding industry peers by as much as 43 percent, shareholder Ernesto Espinoza said in a lawsuit filed in Delaware Chancery Court.
“Moreover, the members of the board are free to continue to award themselves virtually any amount of compensation they choose into perpetuity,” according to the complaint made public today in Wilmington.
Espinoza alleged breach of fiduciary duties, waste of corporate assets and unjust enrichment. He asked a judge to “recoup the unfair excessive compensation” on behalf of the Menlo Park, California-based company and “impose meaningful restrictions on the board’s ability” to grant the awards.