News & Analysis as of

Fiduciary Duty Equity Compensation

Dechert LLP

Delaware Court of Chancery’s Rescission of Elon Musk’s US$55.8 Billion Pay Package Signals Expansion of Scrutiny into Potential...

Dechert LLP on

The Delaware Court of Chancery issued a post-trial opinion, on January 30, 2024, in Tornetta v. Musk, holding that Tesla’s board of directors (the “Board”) breached its fiduciary duties in awarding CEO Elon Musk (with the...more

BCLP

Tesla’s Super-charged Equity Award to Elon Musk Unplugged by Delaware Court Cautionary Tale for Boards and Executives

BCLP on

The Delaware Chancery Court invalidated a substantial equity award to Elon Musk – the largest in history. It applied the entire fairness test instead of the more deferential business judgment rule, finding that Musk...more

Farrell Fritz, P.C.

Let’s Talk About Dilution

Farrell Fritz, P.C. on

When a closely-held business is profitable, self-interested owners naturally want a bigger slice of the pie, especially where the personal relationships among the owners are frayed.  Perhaps that’s why we often discuss the...more

Stinson - Corporate & Securities Law Blog

Court Denies Bid for New Election as a Result of Misleading Disclosures on Restricted Stock Awards

In 2015, the stockholders of nominal defendant, Investors Bancorp, Inc. (“Investors Bancorp” or the “Company”), voted to approve an equity incentive plan (“EIP”) adopted by the Company’s board of directors (the “Board”)....more

Skadden, Arps, Slate, Meagher & Flom LLP

2019 Compensation Committee Handbook

The duties imposed on compensation committees of publicly traded companies have evolved and grown over time. The fifth edition of the Compensation Committee Handbook, authored by our Executive Compensation and Benefits Group,...more

A&O Shearman

Delaware Supreme Court Limits Stockholder Ratification Defense for Director Compensation Decisions

A&O Shearman on

Last week, the Delaware Supreme Court, in In re Investors Bancorp, Inc. Stockholder Litigation (“Bancorp”), reversed the Delaware Court of Chancery and held that awards granted to directors under a stockholder-approved equity...more

A&O Shearman

Reversing A Dismissal, Delaware Supreme Court Declines To Apply Ratification Defense For Discretionary Compensation Awards Under...

A&O Shearman on

On December 13, 2017, the Delaware Supreme Court reversed the Court of Chancery’s dismissal of fiduciary duty breach claims brought derivatively by stockholders of Investors Bancorp, Inc. against its directors in connection...more

Mintz - Employment Viewpoints

Another Reminder that Director Limits set forth in Equity Plans Allow Director Compensation to be Reviewed under the more Lenient...

Earlier this month, in In re Investors Bancorp, Inc. Stockholders Litigation, the Delaware Court of Chancery reiterated its view that placing a meaningful limit on director equity awards to be granted under a stockholder...more

A&O Shearman

Delaware Chancery Court Dismisses Suit Challenging Board Compensation Awards Under A Stockholder-Approved Compensation Plan

A&O Shearman on

On April 5, 2017, Vice Chancellor Joseph R. Slights of the Delaware Court of Chancery granted defendants’ motion to dismiss a stockholder derivative suit against the directors of Investors Bancorp, Inc., which had asserted a...more

King & Spalding

Know Your Limits! Section 162(m) and Excess Equity Grants

King & Spalding on

In the past few years there has been an uptick in stockholder derivative litigation related to equity compensation granted to named executive officers that exceed the plan share limits. The claims against the companies...more

McCarter & English, LLP

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

Latham & Watkins LLP

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

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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

Sheppard Mullin Richter & Hampton LLP

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

Mintz - Securities & Capital Markets...

Proxy Season Litigation Primer: Defending Shareholder Suits to Enjoin Annual Meetings for Allegedly Inadequate Disclosures...

Over the past few years, as plaintiffs have found it increasingly harder to succeed in “say-on-pay” litigation, another type of litigation over proxy disclosures has been on the rise. These cases are generally brought as...more

Snell & Wilmer

SEC Update

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PROXY SEASON PREVIEW - Say-on-Pay and Equity Compensation Plans - Although say-on-pay votes are only advisory in the United States, they will likely continue to be a focus for many companies in the upcoming 2014...more

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