When Facebook Inc (NASDAQ:FB) went public in 2012, the board of directors at the company made a lot of money. The directors were allowed to choose their own pay rate, but now the social network company is being sued for “unjust enrichment” and wasting corporate assets.
According to Bloomberg, Ernesto Espinoza filed a lawsuit at the Delaware Chancery Court. Espinoza claims that Facebook paid its non-employee directors an average of $461,000 last year in stock, which exceeds industry peers by as much as 43%.
“Moreover, the members of the board are free to continue to award themselves virtually any amount of compensation they choose into perpetuity,” said the complaint.
Espinoza is hoping that shareholders will be able to recoup the “excessive compensation” and that Facebook will place limits on further grands to the board of directors. Facebook said that the lawsuit is “without merit” and the company will defend themselves “vigorously.”