To be successful in a court challenge regarding an executive's compensation,shareholders must prove that:
A) the board was grossly uninformed before it set the compensation amount.
B) the executive's performance caused the business to become unprofitable.
C) the amount of the executive's compensation was too high in relation to the compensation of the typical employee within the company.
D) the compensation level is not in the company's best interests.

Question

Quizplus · Accepted Answer

Shareholders must demonstrate that the board was grossly uninformed or acted in bad faith when setting the compensation, as courts typically defer to the board's business judgment unless there is evidence of a lack of due diligence.

To Be Successful in a Court Challenge Regarding an Executive's