There are lawyers on HN, and to the extent they can help OP ask the right questions, it could help keep the legal costs down.

To lower legal costs, ask an Internet forum of randos, including possibly lawyers?

That's terrible advice.

Given that alternative, which is leaving the money to the CEO, I agree with OP's approach.

It wouldn't be what I would do, but then again I'm a former lawyer with many friends who are lawyers. But if the best OP can do is get some preliminary advice from Hacker News, it's worth giving it a shot.

What would you suggest OP do instead of asking HN?

If you are a former lawyer, what would you advise OP to do?

If I were a former lawyer, I wouldn't give any advice other than general knowledge.

e.g.

"Could you sue on behalf of the shareholders of your CEO's embezzlement and win? Maybe? Should you? I don't know, I'm not your attorney, and I haven't studied any of your claims."

That's about as worthless as it gets.

It doesn't take a lawyer to know that a shareholder lawsuit to recover 13 weeks of pay is not going to make financial sense.

Our intention is not to recover the 13 weeks of pay, but we would rather let them keep it, and remove them from the company being that's the "pay out" they get for their shares.

Although, we are trying to understand if this could be considered as fraud so we can remove them with a legally solid reason, and confiscate their shares.

Sounds more like embezzlement than fraud, but a key question will be what powers the CEO that don't require shareholder votes. For example, if an employee came to him and asked for 2 weeks of pay advance due to some emergency, could he grant it unilaterally? Obviously it's different since there's a conflict of interest when he's doing it for himself, but it's still a relevant data point. Check your bylaws to see if this sort of thing is spelled out.

See my questions and comments below.