A Facebook Inc (NASDAQ:FB) shareholder is suing Mark Zuckerberg and other members of the company’s board of directors for allegedly wasting company resources, a report from John Fortt reveals.
Ernesto Espinoza, a Facebook Inc (NASDAQ:FB) shareholder, filed Friday night at the Delaware Chancery Court the lawsuit which questioned the propriety of paying non-employee directors an average of $461,000 each last year.
According to Fortt, that is well above industry standard. However, the CNBC contributor noted that Google Inc (NASDAQ:GOOGL) also pays its directors right around that sum. Furthermore, the lawsuit filed against Facebook Inc (NASDAQ:FB) asks the company to recoup “excessive compensation” and impose restrictions to its board’s ability to pay its members.
Other reports note that Espinoza has alleged in his lawsuit that Facebook Inc (NASDAQ:FB) board was “essentially free to grant itself whatever amount of compensation it chooses.” In question here is the social media giant’s 2012 equity incentive plan that lets an individual director, employee, officer or consultant get as much as 2.5 million shares in the company as incentive. That theoretically gives a person the possibility to be awarded over $150 million each year at Friday’s closing price for the stock.
Meanwhile, other reports say that aside from wasting corporate assets, the lawsuit alleges those named to have also breached fiduciary duties and committed unjust enrichment.
Fortt said in his report that Facebook Inc (NASDAQ:FB) has said that the lawsuit is without merit and that the company vowed to defend itself vigorously.
Shareholders in the world’s largest social media company includes Daniel Benton’s Andor Capital Management which reported 2 million shares in the firm by the end of March. That stake was valued at about $120.48 million then. Another shareholder is Stephen Mandel’s Lone Pine Capital which also reported 2 million shares in the company by the end of the first quarter.