Wilderman v. Wilderman

Eleanor Wilderman (plaintiff) and her ex-husband Joseph Wilderman (defendant) were the two directors of Marble Craft Company, deadlocked after their separation on authorizing Joseph, the president, any salary above $20,800 a year. Despite that deadlock, Joseph paid himself total compensation far exceeding the authorized amount in 1971, 1972, and 1973, while Eleanor received only $7,800 a year. Eleanor sued, and expert testimony put Joseph's reasonable compensation at $25,000 to $35,000 a year, with the IRS permitting only a $52,000 deduction against his $92,538 in 1971 compensation.

Whether a court may order repayment of executive compensation when the recipient, whose own director's vote was necessary to fix it, fails to show the compensation was reasonable.