Over the past eighteen months, public companies have drafted their annual proxy statements knowing that they could become the next target of a new wave of disclosure lawsuits. Those suits have challenged the adequacy of disclosures on executive compensation in connection with say-on-pay votes mandated by Section 951 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”), as well as votes on amendments to stock incentive plans.
Public companies have been concerned that no matter the quality of disclosure, and regardless of a proxy statement’s compliance with federal law and best practices, the proxy statement would be attacked for not saying enough. These claims have been modeled on disclosure claims pursued under state law routinely asserted in merger and acquisition litigation. As in the M&A context, plaintiffs would seek an injunction...
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Topics: Acquisitions, Disclosure Requirements, Dodd-Frank, Executive Compensation, Incentive Stock Options, Mergers, Proxy Statements, Say-on-Pay
Published In: Business Organization Updates, Business Torts Updates, Civil Procedure Updates, Mergers & Acquisitions 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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