Legal Question in Business Law in New York

Re: Legal action against overpaid C.E.O.s

There is a legal imposition of a fiduciary duty on board members and certain executives to the company's stockholders. If a breach of this fiduciary duty can be proven, there may be grounds for a law suit. (Such fiduciary duty does not usually extend to the employees of a company.)

Re: Legal action against overpaid C.E.O.s

Generally, no. The issue comes down to whether, in giving themselves what you consider to be "excessive pay," they breached the fiduciary duties they owe to the corporation and its shareholders. The amount of pay would truly have to be out-of-whack in order for this to occur, something along the lines of that the pay would consitute corporate waste or a pillaging of the company, for corporate officers are given much latitute in this regard.

-- Kenneth J. Ashman; www.AshmanLawOffices.com

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