The question is what kind of contract it was.

There was no employment contract. The shareholders agreed amongst themselves to send him some money regularly, but we had no contract with Nefario.

Not entirely true...

Quote

May 26th shareholder meeting

Motions passed.

An allocation of $40,000 USD as salary for Nefario to cover 12
months starting in May 2012.

The trouble was there was no formal employment contract drawn up specifying performance. It was basically a slush fund.