Hedge Fund Sues Over General Counsel’s $10M Bonus
A hedge fund has filed a lawsuit claiming that a $10 million bonus awarded to the general counsel of Transmeta Corp. is “outrageous, illegal and unconscionable.”
The stockholder’s derivative suit was filed by Riley Investment Management, which owns about 7 percent of Transmeta and has offered to buy the company, the Recorder reports.
The legal newspaper says the bonus was part of a promise the microchip licensing company made to pay its general counsel, John O’Hara Horsley, a percentage of the winnings in Transmeta’s patent infringement suit against Intel. The suit settled for $250 million last year, a figure that was much higher than the company’s market value of $41.8 million. Horsley took a $150,000 pay cut during the lawsuit, and his reduced salary of $250,000 will be subtracted from the bonus.
Riley is represented by Paul, Hastings, Janofsky & Walker. “In this era of people taking a hard look at executive compensation, we view this to be a particularly egregious example of a board and its officers looking out just for themselves,” Paul Hastings partner Peter Stone told the Recorder.
