Re:Seattle C.E.O. Who Promised $70,000 Salaries Wins Suit Fi...
by pjmorris on Monday July 11, 2016 @12:23PM
(#12072138)
I've read, similarly, that the CEO is not bound legally to protect shareholder's best interests ahead of everything else, article linked here [1].
Quoting: "If you review any of the numerous guides prepared for directors of corporations prepared by law firms and other experts, you won’t find a stipulation for them to maximize shareholder value on the list of things they are supposed to do. It’s not a legal requirement. And there is a good reason for that.
Directors and officers, broadly speaking, have a duty of care and duty of loyalty to the corporation. From that flow more specific obligations under Federal and state law. But notice: those responsibilities are to the corporation, not to shareholders in particular."
[1] http://www.nakedcapitalism.com/2013/10/why-the-maximizing-sh...
No such duty exists. What does is the annual general meeting where shareholders vote on proposals put forward by the board, such as the mission statement and a company vision.
If these state "we aim to remunerate employees on a flat rate equal to the highest current salary" then you can't cry later.