Sigma-Aldrich Corp., a specialty chemical firm ranked fifth in the 2014 Newsweek Magazine Green Rankings, was sued by an investor alleging directors granted excessive stock options to the chief executive officer.
The board of the St. Louis-based company violated a long-term incentive plan that limits annual share awards to 200,000 by giving CEO Rakesh Sachdev 271,480 shares in 2013, according to a lawsuit filed today in Delaware Chancery Court by Nelson Good.
While compensation committee members are “delegated the authority under the plan to make and approve equity awards,” that discretion is “not unlimited,” Good’s lawyers said in the complaint.
At today’s price, the total value of the shares is almost $28 million, with the extra shares valued at more than $7 million.
Good Contends the awards “constituted a flagrant breach” of directors’ duties to the stockholders, and asked a judge to order the extra shares returned to the company.
Quintin Lai, a Sigma-Aldrich spokesman, said the company had no comment.
Sigma-Aldrich was named on Newsweek’s environmentally responsible green ranking last month, the company said in a statement.
“We are dedicated to finding ways to lessen our environmental impact and that of our customers, from growing our line of greener alternative products to reducing our water usage by 31 percent since 2010, saving roughly 1.5 million cubic meters of water,” Sachdev said June 5.
The company had $2.7 billion in 2013 sales of chemicals used in industry and life science research, with more than 9,000 employees in 37 countries.
The case is Good v. Sigma-Aldrich, CA9850, Delaware Chancery Court (Wilmington).