Nature of the Case
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Facts
Heller (P) and five other stockholders claimed that bonuses paid to top executive officers were excessive in light of their services and amounted to a waste of corporate assets. The bonus payments had been approved by a stockholder vote. Ten percent of the annual profits were to be distributed, 2 1/2 percent to the president and 1 1/2 percent to each of the five vice-presidents 'in addition to the fixed salary of each of said officers.' In the period from 1929 to and including 1939 -- in addition to $3,784,999.69 in salaries -- bonuses aggregating $11,672,920.27, or total compensation during that eleven-year period of $15,457,919.69. The validity of the bonus payments was upheld in a prior suit. Ps now contend that these large bonus payments bore no relation to the value of the services for which they were given. Ps claim that the payments to the officers have become 'so large as in substance and effect to amount to spoliation or waste of corporate property.'
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