Valero Shareholder Sues to Stop Stock Incentive Plan

Valero Energy Corp.'s stock incentive plan is wasteful and exposes the company to excessive taxes, a shareholder said in a lawsuit that seeks to throw out the oil refiner's compensation program.

Valero shareholder Milton Pfeiffer said that the stock plan is worth as much $20 million per participant, according to a complaint filed Nov. 19 in U.S. District Court in Wilmington, Delaware. Pfeiffer sued the company's board of directors, Valero's chief executive officer and chairman William R. Klesse and four other executives.

"These excessive payments are not justified in light of the fact that the company suffered a loss of net income of nearly $2 billion for the fiscal year ending 2009," Pfeiffer said in the complaint.

The San Antonio-based refiner will lose millions of dollars of tax benefits because the compensation program is defective, according to the lawsuit.

Company spokesman Bill Day said he couldn't immediately comment because he hasn't yet seen the lawsuit.

The case is Milton Pfeiffer vs. Kimberly S. Bowers, 01-cv- 01000, U.S. District Court, District of Delaware (Wilmington).

--With reporting by Phil Milford in Wilmington. Editors: Stephen Farr, Peter Blumberg



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