A board of directors of a Delaware company may delegate its authority to grant equity awards if certain requirements enumerated in the Delaware General Corporation Law (DGCL) are met. Effective August 1, 2023, updates were made to these DGCL requirements.
Under §§ 157(c) and 152(b) of the DGCL, a board must establish the delegation through authorizing resolutions that meet the following requirements:
The consideration described above need not be paid in cash; any benefit to the company that the board approves is acceptable (e.g. the value of services provided by a grantee to the company).
In addition, the authorizing resolutions may not permit delegates to grant equity awards to themselves.
