Excess remuneration
Section 994 Companies Act 2006 deals with conduct that is prejudicial to one or more shareholders. A relatively unusual circumstance for it is a claim that shareholders involved in management have been awarding themselves excessive remuneration.
After the death of the brother, the deceased’s widow was initially extremely appreciative of the support offered by Ian Irvine, the managing director and her brother-in-law.
The expert for Mr Gruber assumed that his starting remuneration should reasonably have been £87,000 comprising a base salary of £72,000 and a commission based on the turnover of the company. He then assumed that the base salary should have increased at an annual rate of 5% compound. These calculations then demonstrated that he had been underpaid from 2001 to 2004 and had been overpaid thereafter. The aggregate net overpayment was £109,000. The expert for Mr Fowler maintained that the total remuneration package for the year to 30 September 2005 should have been £80,000, increasing to £90,000 and £100,000 in the following two years.
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