Wayne Michigan Jury Instruction — 10.10.1 Reasonable Compensation To Stockholder — Employee: In the state of Michigan, when evaluating the compensation of a stockholder-employee, the court uses jury instruction 10.10.1, which provides guidelines for determining reasonable compensation. This instruction helps ensure fair and just compensation practices are followed while considering the dual roles of an individual as both a stockholder and an employee. When analyzing the issue of reasonable compensation for stockholder-employees, several factors are taken into account. These factors include the individual's skills, experience, qualifications, and responsibilities, among others. The court examines the overall market value of similar positions as well as the financial health and success of the company. One of the primary purposes of this instruction is to prevent stockholder-employees from diverting funds from the company through excessive compensation. It ensures that compensation remains reasonable and commensurate with the services rendered, rather than being used as a means of personal enrichment at the expense of the business. Different Types of Wayne Michigan Jury Instruction — 10.10.1 Reasonable Compensation To Stockholder — Employee: 1. Evaluating Stockholder-Employee Compensation: This type of instruction specifically focuses on the evaluation process for determining reasonable compensation for stockholder-employees. It provides jurors with guidelines and factors to consider when assessing the fairness of the compensation arrangements. 2. Market Value Analysis: This type of instruction emphasizes the importance of considering the overall market value of similar positions. It guides jurors to analyze compensation data from relevant industries and companies to ensure the stockholder-employee's pay aligns with prevailing market rates. 3. Financial Health of the Company: This type of instruction highlights the significance of examining the financial condition of the company. Jurors are asked to assess the business's performance, profitability, and overall success, as these factors play a crucial role in determining reasonable compensation to stockholder-employees. 4. Dual Roles Consideration: This type of instruction emphasizes the dual roles of stockholder-employees and ensures that compensation reflects the individuals' contributions as both shareholders and employees. It encourages jurors to evaluate the specific responsibilities and duties fulfilled by the individual in each capacity to determine fair compensation. 5. Preventing Excessive Compensation: This type of instruction emphasizes the need to prevent stockholder-employees from using their positions to extract excessive compensation, which could harm the financial stability of the company. It guides jurors on how to assess compensation packages within the bounds of reasonableness and prevent any misuse of company funds. By providing jurors with clear instructions on evaluating reasonable compensation for stockholder-employees, Wayne Michigan aims to maintain equity and protect businesses from potential exploitation. These instructions help in promoting transparency and fairness in compensation practices, ensuring a healthy and sustainable business environment.