Executive Pay and Loyalty

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        from a compliance, litigation, and risk management perspective

New Developments >>> revised 2015.Oct.24

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2015.Sept.25  Aircraft Perq Litigation Dismissed vs Nordstrom
A Washington district court has dismissed Burbrink v. Campbell, which alleged false and misleading proxy statements had undervalued the Nordstrom family's use of private aircraft.  The company succeeded in establishing that independent directors had overseen the arrangements, and submitted an expert report substantiating its valuations.  Executive usage of corporate aircraft remains a sensitive, complex practice.  More at Corporate Aircraft.

2015.Sept.24  Director Compensation - What to Limit to Defuse Litigation?
In its well-publicized Citrix decision earlier this year, Delaware's Chancery Court comprehensively reviewed past shareholder derivative litigation alleging excessive compensation for directors.  In the wake of that decision, Calma v Templeton (4/30/2015), it has become common for public companies to consider receiving shareholder approval of some director compensation limit when they seek approval for new or amended stock plans. Should approval relate to total compensation, or focus on equity awards? The safest course involves . . .  continued at Director Compensation Litigation.

2015.Sept.20  Section 409A Corrections to Employment Agreements - Time for an Ounce of Protection in 2015
First the bad news: when it comes to 409A violations, the most common sources are employment agreements and releases.  Now the good news: a 2015 IRS Chief Council Memo supports the correction of defective severance provisions if that occurs . . . continued at 409A Home, with a link to a useful 409A diagnostic guide. 

2015.Sept.12   Performance Awards - Don't Underestimate the Impact of a Change in Control
How does a change in corporate control (CIC) affect cash bonuses and equity awards that have performance-based vesting?  It is not problematic that corporate practices tend to differ widely.  Of concern, however, are imprecise plan provisions, or an unexpected triggering of golden parachute problems -- or both.  In terms of what to do . . . continued at Exec Comp Design.

2015.Sept.07   Perquisites Remain Toxic . . . Settlement of SEC Enforcement Action
From investor reactions to public disclosures to SEC enforcement aimed at inadequate disclosures, executive perquisites continue to nag companies that make broad use of company-provided aircraft, housing, legal or tax services, club memberships, and other perquisites. In settling SEC charges that involved nearly $500,000 of unreported executive benefits, not only did MusclePharm agree to pay a $700,000 fine and to use an SEC-approved independent monitor for its governance and audit practices, but the head of its audit committee had to pay a $30,000 fine and two other executives had to pay $180,000 in fines.  These fines reflect the recently-announced policies of the Department of Justice and the SEC to aimed at imposing personal liability on those responsible for corporate misconduct.  . . .  continued at Perquisites

2015.Aug.10  SEC Finalizes "Flexible" Pay Ratio Disclosure Rules
See this Paul Hastings Alert for a comprehensive summary. For the SEC releases and related information, see Pay Ratio Homepage.

Other recently updated pages:
>>> See Past Alerts.

Topical Index

Loyalty Duties:


By Contract (e.g. non-competes)

By Geographic Area

By Law

Enforcement of Loyalty:

  Executive Compensation:



Say on Pay

Georgetown Law Class Spring 2014
"Executive Compensation - Governance, Securities, and Tax"

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Mark Poerio