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Business litigation may concern severance for ousted executives

On Behalf of | Sep 25, 2018 | Business Litigation

Many smaller corporate entities in Oregon have problems similar to the controversy over the severance package to be given to the former CEO of CBS, Les Moonves. CBS has been embroiled in a controversy about sexual harassment at the company and concerning the participation of Moonves in such activities. The intent of the company to give Moonves a $100 million-plus severance package has ignited criticism and led to business litigation by shareholders against CBS.

Although the former CEO denies the accusations by at least six women against him, he has admitted to consensual relations with three of them. Many employees, along with shareholders, have said that Moonves should be imprisoned or suffer economic penalties rather than be rewarded for illegal behavior. These sentiments appear to reflect a majority of opinion in the national polls and public opinion on the subject.

In a number of other companies throughout the nation similar controversies have played out. The arbitration awards and other settlement results have given multi-million dollar severances to executives who have resigned under fire amidst allegations concerning a variety of wrongful conduct. For example, the former CEO of Wells Fargo retired with a $130 million gift package despite the culture of criminal and reckless behavior carried out by employees throughout the Wells Fargo network. The former CEO of Yahoo!, who left the company after failing miserably to turn its declining fortunes around, took a $260 million severance package with her.

Shareholders, realizing that such large, wasteful expenditures are taking from their profits, have filed lawsuits to stop the practice. Some commentators call it the looting of shareholders’ equity by small governing cliques. If a company operating in Oregon is struggling with a similar problem, consulting with an experienced business litigation attorney is the logical first step to take.