Ben Bradford, CEO and chairman of Mega Ltd, hired Larry Summer as his second-in-command in Mega. Ben had a history of not working well with powerful second-in-commands. Larry was a powerful Hollywood talent agent and producer. In less than one year, Ben and Larry were at such odds that Ben and the company’s Board of Director agreed to pay Larry more than $38 million in cash compensation and 3 million shares of Mega stock to leave the company.
The shareholders brought suit against the Mega board for lax supervision of Mr. Ben, the poor business decision of hiring Mr. Larry, and waste for the amount paid to Mr. Larry. The board says that it just made a mistake. Explain if the shareholders have a high chance to win.