Q&A: What is Super's Compensation

Q My question concerns the various forms of compensation our building’s super receives and the shareholders’ right to know the exact sum of his monthly income, as an exact cost to the building. Our super has a fixed salary, which is disclosed to the shareholders in the yearly financial statement. However, there are several other extras that have never been calculated, such as: a free apartment, a free inside parking space, a free land line, cell phone services and free electricity. The electricity bill covered includes his apartment a private washer and dryer (given to him by the co-op) and a huge, second refrigerator. The washing machine, dryer, and second refrigerator are kept in a storage space, and this electricity bill is paid by the corporation.

Since the shareholders are not allowed to keep washers and dryers in their units and use coin operated machines, the private washing machine and dryer constitute an additional expense and are not part of the free apartment. The super received a considerable bonus at Christmas as well. My concern is that none of these expenses were added to his income, as shown in the financial statement, yet they make up a substantial part of the compensation paid to him by the corporation. Do we as the shareholders have the right to know these figures?

—Suspicious Shareholder

A “New Jersey’s For Profit Corporations Act provides the statutory framework by which a shareholder has access to cooperative records,” explains attorney David Byrne, of the New Jersey-based law firm Stark & Stark. “N.J.S.A. 14A:5-28 provides that each corporation shall keep books and records of account. A corporation shall convert into readable form without charge any such records not in such form, upon the written request of any person entitled to inspect them. A court is empowered to, upon proof by a shareholder of proper purpose, irrespective of the period of time during which the shareholder shall have been a shareholder of record, and irrespective of the number of shares held by him, to compel the production for examination by such shareholder of the

books and records of account, minutes, and record of shareholders of a corporation. The court may, in its discretion prescribe any limitations or conditions with reference to the inspection, or award any other or further relief as the court may deem just and proper. One could very easily contend that the records evidencing the “various forms of

compensation” are “books and records of account” and thus subject to inspection. The applicable proprietary lease and bylaws likely offer direction is this regard. In the end, you should have the right to see the records containing the ‘figures’.”

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