Georgia Court: Adverse Shareholder Say-on-Pay Vote, Without More, Does Not Invalidate or Require Rescission of Compensation Decisions Made by Directors of Delaware Corporations


"Hindsight second-guessing and Monday morning quarterbacking of the sort Plaintiffs urge are fundamentally inconsistent with the business judgment analysis." So stated a Georgia state court, which concluded that an adverse Dodd-Frank Say-on-Pay Vote was, without more, insufficient to rebut the business judgment rule's presumption as to directors’ making business decisions regarding executive pay.

Under the Dodd-Frank Act and associated SEC rules, a Say-on-Pay Vote is advisory, non-binding, does not require rescission of a compensation plan that receives an adverse vote by the shareholders and will not create or change the fiduciary duties of the company or its board of directors.

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