Vringo Inc. (VRNG:US), the electronics-patent licensing firm that won a $30.5 million verdict against top Internet searcher Google Inc. in 2012, was sued by an investor claiming excessive executive pay resulted in corporate waste.
Mason Chu, the investor, accused directors of “blatant self-dealing” in awarding themselves “unusually high average” pay of $900,000 each. Chief Executive Officer Andrew Perlman received $7.2 million in total compensation for that year, Chu said in the lawsuit, which was filed yesterday in Delaware Chancery Court.
“Vringo’s equity incentive plan gives the director defendants carte blanche to set their own compensation,” Chu said in the complaint, which seeks return of unfairly acquired money to the company and reformation of corporate-governance procedures to avoid “unjust enrichment.”
A Vringo official who wouldn’t give his name said the company may issue a statement later. He declined to comment further on the lawsuit.
Vringo shares fell 2.88 percent at 3:02 p.m. in Nasdaq trading in New York.
The payout was related to option-acceleration in a merger with another firm, Innovate/Protect Inc., according to court papers, and occurred the same year Vringo won the patent case against Google. Earlier this month, Google’s lawyers asked the U.S. Court of Appeals for the Federal Circuit in Washington to throw out the verdict.
The case is Chu v. Perlman, CA9669, Delaware Chancery Court (Wilmington).
To contact the reporter on this story: Phil Milford in Wilmington, Delaware at email@example.com
To contact the editors responsible for this story: Michael Hytha at firstname.lastname@example.org Joe Schneider, Andrew Dunn