Facebook Investor Sues Company for Paying Itself Too Much
Facebook's IPO and stock market ascension has left the company's board with a big wad of cash—which is great news for the company's directors, who choose their own pay rate. Now Bloomberg reports an investor is suing Facebook and its hoodied founder for "[wasting] corporate assets" and "unjust enrichment."
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.
Like a Halloween candy bowl left unattended on a porch, some kids took more than their fair share. Peter Thiel, already worth $2.6 billion, restrained himself with just $387,874 in stock grants for 2013. Facebook COO Sheryl Sandberg, on the other hand, leaned into $15 million in stock.
The plaintiff hopes to recoup the "excessive compensation" and place limits on further grants to the company's Board of Directors. A Facebook spokeswoman says "the lawsuit is without merit" and the company plans to defend themselves "vigorously."
