An economics and law professor at the University of Southern California has
testified that the compensation package Disney Co. gave to former president
Michael Ovitz was "unreasonable" and one of the most generous ever
awarded to an executive below the level of chief executive officer, the Associated
Press reports.
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Get Your Report Now!Kevin J. Murphy was testifying as an expert witness for shareholders in a lawsuit
alleging the company's board failed in its fiscal responsibilities when it signed
Ovitz to a contract that included $1 million a year in salary, an annual bonus
of $7.5 million, and 5 million stock options, and then paid Ovitz a $140 million
severance package when Ovitz left after 14 months with the company.
Murphy testified that the median combined salary and bonus of similarly situated
presidents in Fortune 500 companies was $540,000, the news service reports.
Murphy said Ovitz's compensation package was not in shareholders' interest.
Shareholders contend the compensation package and severance package should
have received more scrutiny.
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