2015 Compensation Season Litigation Preview: It’s All About Share Counting
The most recent spate of shareholder suits allege that companies have issued stock based compensation awards that are unauthorized under the terms of a shareholder- approved plan. These suits range from claims that companies omit or inaccurately disclose plan terms when seeking shareholder approval of the plans, to claims that companies tally votes improperly when determining whether a plan has been approved, to claims that companies blow through individual or aggregate share limits set forth in stock plans. To help mitigate the risk of such suits this compensation season, we recommend that public companies consider the following.