This section is from the book "Business Finance", by William Henry Lough. Also available from Amazon: Business Finance, A Practical Study of Financial Management in Private Business Concerns.
In a small corporation which has come into the control of one faction and is being exploited to the detriment of the general body of stockholders, the simplest and most common method is through payment of exorbitant salaries. So long as the salaries are kept within the bounds of reason and so long as the real purpose - which is to distribute profits in this form - is not made too plainly evident, this practice is legally unassailable. It may, however, become dangerous to the exploiters in case their salaries are suddenly jumped, or in case there is a rearrangement of salaries which so clearly corresponds to shareholdings as to leave no doubt that the increases are really mere devices for distributing dividends to the dominant faction at the expense of the other shareholders.