For the quarter ending on 30^thSeptember 2022 CEO of YBAK Corporation John Skinner approached CFO Scott Branch to approve a 15% bonus to all sales related departments on the new products sold by them. The totalamount of the new products sold was $3.4 million and generally YBAK customers avail an average credit term of 90 days.

Mr. Scott Branch being a Board member, approved the payment in the Board Meeting, to be ratified at the forthcoming AGM (Annual General Meeting) on April 23. 2023. YBAK Corporation computed bonus accordingly and paid the bonus toall the sales staff including CEO on 15^th October2022.

Meanwhile on 27^th October 2022 John informed to the company that he has to pursue another opportunity in a company back home in Irelandand therefore resigned. As he has to tender a month's notice to the company, his last date at YBAK was worked out to be 26^th November 2022.Some of the sales staff (71%) have also left the company between September 2022 and December2022.

Later on in December month it was realized by the company that around 82% of the products sold in September were returned by the customers citing abnormal reasons and a credit note is issued to those customers accordingly. YBAK Corporationcontacted John and other sales staff requesting them to return the bonus along with the applicable taxes back to the company which they declined citing product quality related issues.

(The matter is sub judice in the New York Eastern District Court on the date of this write up).

Question 1: Shareholders called an EGM (Extraordinary General Meeting) on December 18, 2022 to find out the amount under dispute as faced by the company and its former CEO and other staff. Explore the amount?

Question 2: EGM did not ratify the action of the Board Meeting (it got only 3.5% votes in favor)and instead passed a resolution with 93% majority for YBAK Corporation to implement some sort of stringent internal controls and governance on the performance incentives to the sales staff. Work individually and suggest some measures to the company for preventing the recurrence of this business activity?

Answer rating: 100% (QA)

Question 1 To explore the amount under dispute as faced by the company and its former CEO and other staff we need to consider the following factors 1 Total Bonus Paid The total bonus paid to all sales ... View the full answer