Caterpillar Inc., the world's largest maker of construction andmining machines, was sued by investors who allege directors wastedcorporate assets by not ensuring that executive-incentive planswere tax-deductible.

Board members also wrongly enriched themselves by takingcompensation that couldn't be deducted, and the company madeinsufficient disclosures to stockholders, lawyers for aPhiladelphia asbestos workers' pension fund and the Lansing,Michigan, Police and Fire Retirement System said in two lawsuitsfiled yesterday in federal court in Wilmington, Delaware.

“There is no reason not to implement compliant compensationplans” that save the Peoria, Illinois-based company tax money, theinvestors contend in court papers.