California Corporations Code 5235 – (a) The board may fix the compensation of a director, as …
(a) The board may fix the compensation of a director, as director or officer, and no obligation, otherwise valid, to pay such compensation shall be voidable merely because the persons receiving the compensation participated in the decision to pay it, unless it was not just and reasonable as to the corporation at the time it was authorized, ratified or approved. The board shall take other actions that are required by subdivision (g) of § 12586 of the Government Code, if applicable.
(b) In the absence of fraud, any liability under this section shall be limited to the amount by which the compensation exceeded what was just and reasonable, plus interest from the date of payment.
Terms Used In California Corporations Code 5235
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Fraud: Intentional deception resulting in injury to another.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
(Amended by Stats. 2011, Ch. 442, Sec. 6. (AB 1211) Effective January 1, 2012.)