Ineffective Stockholder Approval for Director Equity Awards

Posted by Joseph Penko, Robert Saunders, and Audrey Murga, Skadden, Arps, Slate, Meagher & Flom LLP, on Sunday, January 7, 2018 Editor's Note: Joseph Penko and Robert Saunders are partners and Audrey Murga is an associate at Skadden, Arps, Slate, Meagher & Flom LLP. This post is based on a Skadden publication by Mr. Penko, Mr. Saunders, Ms. Murga, Regina Olshan, Neil Leff and Joseph Yaffe, and is part of the Delaware law series; links to other posts in the series are available here. On December 13, 2017, the Delaware Supreme Court issued an opinion, In re Investors Bancorp, Inc. Stockholder Litigation, Case No. 169, holding that, except under limited circumstances, the court will not apply the deferential “business judgment rule” in reviewing challenges to director compensation awards granted pursuant to stockholder-approved equity plans. Instead, such awards are subject to an “entire fairness”…

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