Equity Compensation

News & Analysis as of

When It Comes To Director Compensation, California Is Not Delaware

Yesterday, I wrote about my disagreements with the approach to director compensation adopted by the Delaware Court of Chancery in Calma v. Templeton, 114 A.3d 563 (Del. Ch. 2015) and Seinfeld v. Slager, 2012 Del. Ch. LEXIS...more

Calma v. Templeton, C.A. No. 9579-CB (Del. Ch. Apr. 30, 2015) (Bouchard, C.)

In this opinion, the Court of Chancery denied a motion to dismiss a claim challenging grants of compensation to non-employee directors pursuant to a compensation plan that had been approved prospectively by stockholders. The...more

Successful Planning and Exit Strategies for Government Contractors in 2015 and Beyond

In This Presentation: - How To Position Your Business To Reap The Benefits Of A Liquidity Event - How To Position Your Business To Reap (Internal Review And Check-Up) - Strategic And Structuring...more

Blog: Delaware Chancery Court Applies Entire Fairness Standard Of Review To Director Compensation

What is the judicial standard of review applicable to an award of compensation by directors to directors under an equity incentive compensation plan that has been approved by the shareholders? That was the question before...more

The Days of the Vultures (Silicon Valley – Season 2 Finale)

This season’s finale of Silicon Valley provided Richard with only the briefest moment of victory before he once again faces losing Pied Piper. First, the arbitrator rules that because Richard used a Hooli computer while...more

Coming to America – A Guide for FPIs

In this Issue: - The Latham FPI Guide: Accessing the US Capital Markets From Outside the United States - Chapter 1: Background - Chapter 2: Unregistered Global Offerings – Regulation S, Rule 144A and...more

Corporate Divorce: Treat Your Employment Contract Like a Prenup

Once again I observe that while I am not a divorce lawyer, the analogies of divorce law to my employment practice are startling. Two parties meet (the interview), they realize how many things they have in common (the job...more

Yet Another Reason to Consider Separate Annual Limits on Director Equity Awards

As reported in a prior blog post, public company employers that are adopting or amending equity-based compensation plans should consider adding a separate annual limit on director equity awards. In a recent Delaware Chancery...more

Protecting Director Equity Grants from Entire Fairness Review

The Delaware Court of Chancery recently held in Calma v. Templeton that the decision by the Citrix Systems, Inc. board of directors to grant equity compensation to its non-employee directors was subject to the entire fairness...more

A Key Reminder to Directors of Delaware Corporations When Granting Equity Awards under an Equity Incentive Plan

Corporate directors routinely make decisions regarding their own compensation. If challenged by stockholders, such decisions are generally reviewed by Delaware courts under the onerous "entire fairness" standard, which...more

Director Compensation After Calma v. Templeton: Proactive Steps to Consider

Delaware case exposes director compensation to heightened “entire fairness” standard absent adequate stockholder ratification - The Delaware Court of Chancery recently decided a case that makes it easier for plaintiffs...more

Back To The Future – Should Stock Incentive Plans Impose Grant Limits on Non-Employee Director Awards?

On April 30, 2015, the Court of Chancery of the State of Delaware rendered an important case decision in a procedural matter dealing with the equity compensation of non-employee members of a company’s board of directors (see...more

Director Equity Grants Subject to Entire Fairness Review

In Valma v. Templeton et al, the Delaware Court of Chancery held that grants of restricted stock units, or RSUs, to directors of Citrix Systems, Inc. were subject to an entire fairness standard of review. The court found...more

Final Regulations on Section 162(m) Deduction Limit Exceptions

New final regulations(the “Final Regulations”) have been issued clarifying and altering the “qualified performance-based compensation” exception and the transitional “reliance period” exception for newly public companies to...more

Performance Based Equity Compensation [Video]

In this video clip, Pam Greene discusses the reasons behind the shift to performance-based equity compensation, how it differs from fixed equity compensation, and what executive boards need to consider when structuring...more

Practical Advice for Compliance with Recent Amendments to the Internal Revenue Code Section 162(m) Regulations

The recent amendments to the Section 162(m) regulations largely follow the changes set forth in the proposed regulations issued in 2011, clarifying two exceptions from the Section 162(m) tax deductibility limit...more

Changing the Status Quo with Extended Option Programs

As technology companies find themselves pushing back IPO timelines and staying private for longer periods of time, they continue to aggressively compete for talent, often against public companies like Google and Facebook. ...more

ISS Releases Four Sets of FAQs, Glass Lewis Provides an Update, and FASB and IASB Make Certain Decisions Relevant to Equity...

Proxy advisory firms Institutional Shareholder Services (ISS) and Glass Lewis have both released updates to their policies that outline how they will form recommendations to shareholders on how they should vote on governance,...more

SEC Remarks at the Practising Law Institute’s Program Titled “SEC Speaks in 2015”

On February 20, 2015, several representatives from the SEC spoke at the Practising Law Institute’s program titled “SEC Speaks in 2015,” including Chair Mary Jo White and Commissioner Louis A. Aguilar. Ms. White provided...more

SEC Proposes Equity Hedging Disclosure Rules under Dodd-Frank

On February 9, 2015, the Securities and Exchange Commission (the “SEC”) proposed long-awaited equity hedging disclosure rules to implement Section 955 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010...more

Glass Lewis Enhances its Pay-for-Performance and Equity Plan Models

Glass Lewis, a leading proxy advisory firm, recently announced enhancements to the performance metrics used in both its US and Canadian pay-for-performance (PFP) models and its US equity plan model. The current Glass Lewis...more

"Global Workforces Create Compensation Challenges for Employers"

In-house legal and human resources professionals at companies of all sizes are expected to navigate the legal and cultural ramifications of employing a global workforce. Compensation programs designed for employees at a...more

Preparing for the 2015 Proxy Season

Similar to last year, there are no new disclosure requirements which need to be reflected in this year’s proxy statement; however, with ongoing shareholder activism and the desire of companies to communicate effectively with...more

ISS Issues FAQs on Equity Plan Scorecard

As reported in my October 24, 2014 post, Institutional Shareholder Services Inc. (“ISS”), a leading proxy advisory firm, has adopted a new “scorecard” approach to evaluating public company equity compensation plans.  In a...more

SEC Proposes JOBS Act Rules for Exchange Act Registration Requirements

As mandated by the JOBS Act, the SEC has issued proposed amendments to revise the rules related to the thresholds for registration, termination of registration, and suspension of reporting under Section 12(g) of the Exchange...more

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