Want to lose $6 million? Be a “faithless servant.”

Last week, a court ordered former Astra USA Inc. CEO Lars Bildman to pay back $5.6 million in salary and $1.18 million in bonuses earned from 1991 to 1996. The court concluded that Bildman breached his fiduciary duty to the company by being a “faithless servant” during those years.

What made Bildman “faithless”? A 1996 investigation that resulted in his termination concluded that he (1) spent company money on vacations, home repairs and — according to some reports — prostitutes and (2) sexually harassed female employees.

In 1998, Astra paid nearly $10 million (a record at the time) to settle a sexual harassment lawsuit filed by the EEOC based in part on the allegations against Bildman.

Courts, Congress and corporate boards are facing more and pressure to hold executives accountable for their misdeeds. Some commentators applauded Astra for taking decisive action. It promptly and thoroughly investigated the accusations against Bildman, firing him a few weeks later without severance. Astra spokesperson Laura Woodin said the court’s decision “validates” its decision to “hold its former executive accountable for his conduct and allows our company to move forward.”

What was Bildman’s reaction? “Of course I am disappointed,” he said. “It would be impossible not be disappointed.” He claims he spent all his millions defending his court case. “The money doesn’t concern me at all,” he said. “I have no money, so it will be uncollectable.”

This entry was posted on Tuesday, October 13th, 2009 at 11:40 am and is filed under Employment Law News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.