For Whom the Till Tolls

In 1940, directors of Republic Steel Corp. decided to give rough-&-tumble Board Chairman Tom Girdler a $51,000 boost over his regular $175,000 salary. At first they gave it to him in the form of an annuity, which they thought was exempt from taxes. But when the Board of Tax Appeals ruled that the sum was not exempt, Tom Girdler surrendered the annuity for cash.

Last week the bonus was knocked in the head again. Ohio's Cuyahoga County (Cleveland) common pleas court upheld a Republic stockholder's contention that the extra $51,000 was too much of a good thing, ordered bluff Tom Girdler to give it back. Judge Stanley L. Orr laid it on hot & heavy: the size of the bonus, said he, had depended not upon Girdler's devotion to duty, but upon the size of the profits that were left at the end of the year. "If such conduct were approved," he said, "directors might soon forget that companies are operated primarily to make money for the stockholders and not for management."

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