Question

In order to attract a top manager away from another company, Scavenger Corporation of- fered her a salary, profit sharing, and pension package that would cut deeply into dividends to most shareholders for at least two years. Is this legitimately within the corporate powers?

Answer 1

Yes, it is legitimately with corporate powers.

Step-by-step explanation:

• Corporate powers include the right of a company to buy or sell, recruit or dismiss, reward or punish, expand or contract, etc., at its own discretion. In other words, it enables a company to make any legitimate decisions or actions that would procure profit.
• Here, the decision to offer her a salary, profit sharing, and pension package that would cut deeply into dividends to most shareholders for at least two years is done with the motive to benefit the company in the long run.
• The companies may take any action which will procure huge profit even if it may have effect in the short-run. It is legitimately within corporate powers.