CLAYTON, Mo. (CN) – The CEO and top executives of Furniture Brands International got more than $10 million while they ran the company into the ground – driving its market capitalization from $1.1 billion in 2006 to $35 million today – a loss of 97 percent, shareholders say in St. Louis County Circuit Court.
Lead plaintiff Henry Taylor says company directors “completely abdicated” their duty to shareholders by approving the lavish payments.
Taylor says Furniture Brand’s market capitalization fell from $1.1 billion in 2006 to $100 million at the end of 2008 and has continued to decline to $35 million this year, with a historically low stock price of 70 cents a share.
CEO Ralph Scozafava and other top dogs got “excessive compensation for their performance during 2007 and 2008” despite this abysmal performance, the suit states.
Taylor says the payments violate Furniture Brands’ compensation program, which includes a base salary with short- and long-term incentives. He seeks personal damages, damages for Furniture Brands and wants the executives to return their excessive compensation. He is represented by Jeffrey Schmitt of St. Louis.
Furniture Brands and 14 individual directors and executives are named as defendants.