Opinion ID: 2308852
Heading Depth: 1
Heading Rank: 8

Heading: Berkowitz's Compensation

Text: Brenner also asserted that Berkowitz was receiving a salary in excess of that authorized by his employment agreement. Berkowitz entered into an employment agreement with Arbee in November of 1976 that set his annual salary at $125,000 unless Arbee's board later determined that he should be paid a different amount. Berkowitz received two board-approved salary increases, with the result that in June 1981 he was earning $350,000 per year. Starting in 1983, however, he began to take salaries in excess of the approved sum. By 1989, Berkowitz reported a salary of $474,206. Although Berkowitz testified that his compensation was clearly reflected in Arbee's financial statements and that the directors of the corporation knew of his compensation through informal discussions, plaintiff had received no official notice of the salary increases. Plaintiff produced evidence that tended to show that Berkowitz's compensation was excessive in comparison to Arbee's pre-tax profits. The trial court rejected Brenner's allegation that payment of Berkowitz's annual salary was oppressive to her or that her expectations had been frustrated by Berkowitz's salary. It found that Berkowitz's salary was reasonable in light of the company's impressive growth. The court hinted, however, that if Berkowitz's salary continued to grow at the expense of the corporation and its shareholders, and without corresponding increases of dividends or other benefits to the minority shareholder, Berkowitz's salary might be grounds for a future claim of oppression.