June 20, 2012
The Say-on-Pay Lawsuits: A Few in 2012 So Far
– Broc Romanek, CompensationStandards.com
On Monday, Monolithic Power Systems announced the dismissal of its say-on-pay lawsuit. We haven’t heard much about this year’s crop of say-on-pay lawsuits, probably because it’s a little early and the plaintiffs haven’t fared too well so far in last year’s suits. Mark Poerio of Paul Hastings has maintained this chart of suits (and we have our own list) – here is something that Mark blogged about a Texas lawsuit:
Copycat “Failed” Say on Pay Class Action – Helix Energy Hit
Will Texas provide a friendlier forum than Delaware for the latest complaint that second-guesses executive compensation decisions by reference to a later say on pay vote? The complaint against Helix Energy begins with the usual refrain: “This is a ‘failed’ say on pay shareholder derivative action, arising from the Board’s unwarranted and excessive spending … on executive compensation.” Within the same paragraph, the complaint contorts applicable corporate law by intimating that the business judgment rule is violated where a majority of shareholders disagree with a board decision (see complaint ΒΆ3: “A majority of the Company’s stockholders agree; they rejected the Board’s business judgement by voting …”).