Things can get messy if fiduciary duty to the company is breached, writes Howard Levitt. Read more
But it is not just bad branding and embarrassment to themselves and their families. There is also the prospect of long, drawn-out lawsuits, dismissals for cause and orders to repay all sums deemed “inappropriate”: stock options, dividends, salaries, bonuses — even their hard-negotiated wrongful dismissal payments, not to mention additional damages for breach of fiduciary duties.
After all, that superb severance package you negotiated for yourself will appear less salutary after spending three years litigating for it — or if shareholders or a new owner emerge victorious and demand reimbursement.Article content Despite his credentials, Goegan managed to violate his fiduciary duties twice over, and paid dearly for it.
When the share price exceeded $13.25, Royal Group called in the warrant and Goegan sold his portion of the shares for a $200,000 profit. Goegan and the others had been entitled to a bonus which this replaced, but Goegen ended up with a higher bonus than he normally received.Article content The case highlights the necessity of being transparent with all stakeholders when negotiating or revising executive compensation.Article content
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Howard Levitt: Top executives must walk a fine line when negotiating their own compensationThings can get messy if fiduciary duty to the company is breached, writes Howard Levitt. Read more
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