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

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"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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Published In: Administrative Agency Updates, Business Organization Updates, Civil Procedure Updates, General Business Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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