Supreme Court of New York
29 N.Y.S.2d 653 (1941)
In 1912, virtually all of the 62,000 stockholders of the American Tobacco Company adopted an incentive compensation by-law, which permitted large bonuses to be paid to the president and vice presidents of the company each year, in addition to their salaries. The company is a giant industrial enterprise, with sales in 1939 amounting to $262,416,000. Between 1929 and 1939 the officers of the company, pursuant to the 1912 by-law, received a total of $3,784,999.69 in salaries and $11,672,920.27 in bonuses. Seven of the company’s stockholders (plaintiffs), holding fewer than 1,000 of the company’s total 5,074,076 shares, brought a derivative action on behalf of the company against the company’s directors (defendants), claiming that the majority stockholders, against the minority’s protests, committed waste and spoliation in permitting large bonus payments that bore no relation to the value of services being given.
Rule of Law
Holding and Reasoning (Collins, J.)
What to do next…
Unlock this case brief with a free (no-commitment) trial membership of Quimbee.
You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 97,000 law students since 2011. Some law schools—such as Yale, Vanderbilt, Berkeley, and the University of Illinois—even subscribe directly to Quimbee for all their law students. Read our student testimonials.
Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.
Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students. Read more about Quimbee.
Here's why 236,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 14,200 briefs, keyed to 189 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.