New York Jury Instruction — 10.10.1 Reasonable Compensation To Stockholder — Employee is a legal directive provided to jurors in New York State courts during trials involving cases related to employment and compensation disputes between a stockholder and an employee. This instruction specifically addresses the issue of reasonable compensation that should be provided to a stockholder who is also an employee of the corporation. Often, stockholders of a corporation may also perform services or work for the company as employees. In such cases, it becomes crucial to consider whether the compensation provided to the stockholder-employee is reasonable or if there is any potential violation of employment laws. The New York Jury Instruction — 10.10.1 guides the jury in making informed decisions by considering various factors that determine whether the compensation in question is reasonable. These factors include: 1. Nature of the work performed: Jurors will analyze the type of services the stockholder-employee provided to the corporation. They will assess the level of skill, expertise, and responsibility required for the job. 2. Comparable industry standards: The instruction urges jurors to consider the prevailing rates of compensation for similar positions within the industry. This evaluation helps determine whether the compensation offered to the stockholder-employee aligns with market norms. 3. Company profits and financial stability: Jurors will assess the financial health of the corporation and its ability to sustain reasonable compensation. They will consider factors such as the company's profitability, revenues, and overall financial stability. 4. History of compensation: Jurors will delve into the employment records, including past compensation packages provided to the stockholder-employee. This information helps determine if there have been any significant changes in compensation over time and whether they align with the company's performance. 5. Intent of the parties: The instruction also advises jurors to consider the intentions of both the stockholder-employee and the corporation regarding compensation. It helps determine if there was a genuine effort to provide fair and reasonable remuneration. Different Types of New York Jury Instruction — 10.10.1 Reasonable Compensation To Stockholder — Employee: 1. Reasonable Compensation in Limited Liability Companies (LCS): This type of instruction specifically addresses the compensation issues related to stockholder-employees in LCS, which operate under different laws and regulations than traditional corporations. 2. Reasonable Compensation in Closely-Held Corporations: In cases involving closely-held corporations, where a few individuals own the majority of shares, this instruction considers the unique dynamics and relationships involved in determining reasonable compensation for stockholder-employees. 3. Reasonable Compensation for Controlling Stockholders: This instruction pertains to situations where stockholder-employees have significant influence or control over the corporation. It considers the potential for self-dealing or undue influence on compensation decisions. In summary, the New York Jury Instruction — 10.10.1 Reasonable Compensation To Stockholder — Employee is a legal guideline instructing jurors on how to evaluate and determine if the compensation provided to a stockholder who is also an employee is reasonable. It encompasses multiple factors and can be adapted to suit specific scenarios, such as compensation in LCS, closely-held corporations, or cases involving controlling stockholders.