1. The average total compensation for S&P 500 directors is $316,091, an increase of around 3% from $305,808 in 2021.
2. Stock grants represent the largest share of director compensation, at 56% — the same proportion as last year. And these are again followed by cash at 37% of compensation, the same as last year.
3. The composition of equity awards has shifted significantly over the past two decades, with fewer companies granting options and more providing stock awards. This year, 11% of boards disclosed that they award stock options to directors — down from 25% in 2012, and from 77% in 2002.
4. The shift by S&P 500 boards away from paying meeting fees continues. Only 24 boards, or 5%, pay board meeting fees — down from 30 companies (6%) in 2021. A decade ago, 33% paid meeting fees; in 2002, 70% did.
5. Of the 176 S&P 500 boards with independent board chairs, 91% provide the chair with additional compensation (worth an average of $164,205, only $71 less than last year). The value of additional compensation for board chairs ranges from $25,000 to $585,000.
6. Among boards that have a lead or presiding director, 82% pay them additional compensation, averaging $44,314. Lead directors are more likely than presiding directors to receive additional compensation — 86% versus 51% — although the gap has narrowed since last year (87% versus 38%).
The DOJ is adopting its first-ever Department-wide policy to guide prosecutors on considering corporate compensation programs & clawback policies in criminal enforcement decisions, according to a 15-page memo from Deputy AG Lisa Monaco released late last week and described in these remarks at NYU.
The memo says that “although an effective compliance program and ethical corporate culture do not constitute a defense to prosecution of corporate misconduct, they can have a direct and significant impact on the terms of a corporation’s potential resolution with the Department” – and prosecutors will now consider compensation structures as a factor in that evaluation. This excerpt explains the details:
Corporations can best deter misconduct if they make clear that all individuals who engage in or contribute to criminal misconduct will be held personally accountable. In assessing a compliance program, prosecutors should consider whether the corporation’s compensation agreements, arrangements, and packages (the “compensation systems”) incorporate elements such as compensation clawback provisions-that enable penalties to be levied against current or former employees, executives, or directors whose direct or supervisory actions or omissions contributed to criminal conduct. Since misconduct is often discovered after it has occurred, prosecutors should examine whether compensation systems are crafted in a way that allows for retroactive discipline, including through the use of clawback measures, partial escrowing of compensation, or equivalent arrangements.
Similarly, corporations can promote an ethical corporate culture by rewarding those executives and employees who promote compliance within the organization. Prosecutors should therefore also consider whether a corporation’ s compensation systems provide affirmative incentives for compliance-promoting behavior. Affirmative incentives include, for example, the use of compliance metrics and benchmarks in compensation calculations and the use of performance reviews that measure and reward compliance-promoting behavior, both as to the employee and any subordinates whom they supervise. When effectively implemented, such provisions incentivize executives and employees to engage in and promote compliant behavior and emphasize the corporation’s commitment to its compliance programs and its culture.
Prosecutors should look to what has happened in practice at a corporation-not just what is written down. As part of their evaluation of a corporation’s compliance program, prosecutors should review a corporation ‘s policies and practices regarding compensation and determine whether they are followed in practice. If a corporation has included clawback provisions in its compensation agreements, prosecutors should consider whether, following the corporation’s discovery of misconduct, a corporation has, to the extent possible, taken affirmative steps to execute on such agreements and clawback compensation previously paid to current or former executives whose actions or omissions resulted in, or contributed to, the criminal conduct at issue.
Finally, prosecutors should consider whether a corporation uses or has used non-disclosure or non-disparagement provisions in compensation agreements, severance agreements, or other financial arrangements so as to inhibit the public disclosure of criminal misconduct by the corporation or its employees.
As a whole, the memo outlines a wide-ranging overhaul to DOJ policies that will affect cooperation credit and enforcement decisions. It’s the culmination of a year-long review by the “Corporate Crime Advisory Group” – with input from experts including audit committee members, in-house attorneys, compliance & ethics practitioners and more. The memo’s bottom-line theme is that the DOJ wants to hold executives and other involved individuals responsible for corporate misconduct.
Deputy AG Monaco has directed the Criminal Division to develop further guidance by the end of the year on how to reward corporations that develop and apply compensation clawback policies, including how to shift the burden of corporate financial penalties away from shareholders – who in many cases do not have a role in misconduct – onto those more directly responsible.
Companies should consider the elements listed in this memo and the forthcoming guidance as they take a closer look at their clawback policies, compensation programs, and related employment agreements & policies. You should already have some time reserved on your calendar and board agendas to review those items, since we’re expecting final Dodd-Frank clawback rules from the SEC any time now, and the Commission’s Enforcement Division has said that executives should be “on notice” that it is committed to using using SOX 304 clawbacks to incentive a culture of compliance. The DOJ’s new stance makes it all the more important.
We’ll be sharing critical guidance on how to prepare for the new clawback rules and navigate the current enforcement environment at our “Proxy Disclosure & 19th Annual Executive Compensation Conference” this October. In particular, our session on “Clawbacks: Preparing for Final SEC Rules” – with Davis Polk’s Kyoko Takahashi Lin, CompensationStandards.com’s Mike Melbinger, Gibson Dunn’s Ron Mueller, and Hogan Lovells’ Martha Steinman – will give you practical action steps to take now. Here’s the full agenda for the Conferences – 18 essential sessions over 3 days. Sign up online, email sales@ccrcorp.com, or call 1-800-737-1271. We’re also posting other resources and practical guidance in our “Clawbacks” Practice Area for members.
As I’ve reiterated time & time again, the Reg Flex Agenda that the SEC publishes reflects the priorities of the Chair and isn’t a commitment to a particular rulemaking schedule. However! The Commission sure does seem to be on a pretty fast clip – and SEC Chair Gary Gensler seems to be committed to tying up loose “Dodd-Frank” ends. With pay versus performance rules adopted in August, there’s reason to believe that clawback rules are also coming soon. Both of those rules were slated for being finalized by October in the most recent Reg Flex Agenda – and it’s now *checks calendar* … mid-September. Clawbacks are complicated. There may be some component of a “little r” restatement in the final rule, once the SEC acts and the exchanges get around to following through with their own rules.
A blog this week from Jun Frank and Paul Hodgson at ISS Corporate Solutions summarizes comments on the reoopened proposal, current market practices, and an ISS policy clarification from earlier this year. Here’s an excerpt:
Earlier this year, Institutional Shareholder Services announced a clarification of its position on clawback policies. In order to receive credit for having a clawback policy under ISS methodology on equity plan evaluation, the policy “should authorize recovering upon a financial restatement and cover all or most equity-based compensation for all NEOs.” The policy notes that no credit will be given if the clawback covers only the limited requirements under the Sarbanes-Oxley Act nor if a company says it will wait until the SEC’s proposed rule is finalized before introducing a policy.
The SEC aims to release the final regulations by October, which may finally result in companies being required to adopt a clawback policy. While a number of businesses plan to adopt a clawback policy only after the rules are finalized, the majority already have such a policy in place.
The scope of clawback policies has also evolved over the years, with more and more boards expanding their reach to enable the recovery of compensation for actions that materially harm the company and its shareholders. The final rules may give companies an opportunity to re-examine their policies to see whether their scope is reasonable considering the firm’s operations, incentive structures and peer practices.
It makes sense that most companies already have some form of clawback policy, due to Sarbanes-Oxley provisions and market norms around non-competes, misconduct and other employment-related issues. But companies will need to pay close attention to what the new rules require and revisit their policies and agreements to make sure they conform. Plus, the SEC’s Enforcement Division is already on a tear to recover incentives under SOX 304, so it’s worth reminding executives of those ins & outs, too (the bottom line: file accurate financials…or else.)
Make sure you’re ready for this complex requirement. There are sure to be tons of questions from your higher-ups if you have to make any changes that could remotely affect their arrangements – so you’ll want to have a very clear understanding of exactly what’s required and the consequences for not complying. Register for our “Proxy Disclosure & 19th Annual Executive Compensation Conferences” – to get the crash course on “Clawbacks: Preparing for Final SEC Rules” with Davis Polk’s Kyoko Takahashi Lin, Gibson Dunn’s Ron Mueller, Hogan Lovells’ Martha Steinman, and Mike Melbinger. Plus, 17 other panels, including an interview with Corp Fin Director Renee Jones. The Conference is being held virtually over 3 days – October 12th – 14th. Sign up online (via the “conference” drop-down and “PDEC” options), email sales@ccrcorp.com, or call 1-800-737-1271.
One aspect of this is centered on capping severance payouts: we’ve blogged about recent shareholder proposals which led at least one prominent company to cap the cash component of those arrangements. (And we’ll be discussing what other companies should do about that at our upcoming “19th Annual Executive Compensation Conference.”)
Going even further is this 16-page position paper (available for download) from European impact investor Triodos. The asset manager first outlines these “best practice” elements of executive pay:
1. Disclosure, Transparency & Responsiveness: consisting of disclosure & intelligibility; transparency & power; and responsiveness
2. Risk-Taking: including a cap on variable pay; clawback policy; and performance targets & thresholds
3. Pay-for-Performance: relating to performance-based payouts; performance metrics & TSR; and company value
4. Sustainability & Alignment with Long-Term Success: including carefully-designed ESG metrics, alignment with long-term success, and appropriate severance agreements
But the more “extreme” part of Triodos’ policy, is how it votes against “the extremes.” Here’s what that means:
1. CEO pay cap of EUR 2.5 million, adjusted for company size (e.g., the largest companies could pay up to 8x that)
2. CEO pay ratio cap of 100:1, not size-corrected
3. Qualitative analysis that allows for tolerance of excessive pay levels if the compensation structure & policies are significantly aligned with long-term value creation and ESG impact
Triodos says that if a company hasn’t already adopted some best practices and/or isn’t open for dialogue, it is excluded from their investment universe.
Triodos isn’t the first investor to float this concept, and it won’t be the last. While these calls tend to come out of European-based investors and asset managers, they are a reaction to global pay levels – and Triodos has engaged with companies including Adobe, Cisco, Disney, Nike, Paypal, Prologis and Starbucks, according to this Responsible Investor article.
These discussions come at a time when CEO pay reached new heights (again) in 2021. I’ve blogged that this wealth accumulation is due in large part to the shift to stock awards. And in the past few years, the embrace of “moonshot” awards has only accelerated the trend. Dave Lynn is covering what you need to know about moonshot awards in the forthcoming issue of The Corporate Executive – so I won’t steal his thunder, but I will reiterate that investors generally don’t like mega-grants or special retention awards.
Compensation committees have a lot to think about these days, and calibrating the amount of CEO pay isn’t easy during this time of market volatility and retention sensitivity. But with continued focus on overall human capital management, directors should be aware that investors and other stakeholders are signaling that tempering payout levels and mega-grants must continue to be part of the conversation.
If you don’t already have access to The Corporate Executive, email sales@ccrcorp.com to check it out. The newsletter is published 5 times per year and Dave ensures that it is always full of valuable information.
Way back in 2019, we blogged that a shareholder went to court to challenge the $56 billion compensation award that was awarded to Elon Musk in 2018. The Delaware Court of Chancery determined that the case could proceed under an “entire fairness” standard because Musk was a controlling shareholder, even though it had been approved by shareholders. Nearly three years later – now that the Tesla moonshot award has paved the way for similar deals at other companies – the compensation case is going before Chancellor Kathaleen McCormick on the merits in late October.
In case you missed it, Chancellor McCormick is also presiding over the litigation that will determine whether Musk can walk away from his merger agreement with Twitter (John’s been blogging about that case on DealLawyers.com, and if you want the blow-by-blow, follow The Chancery Daily on Twitter. Yesterday, the WSJ reported that Twitter’s shareholders are poised to approve the deal – Musk hasn’t voted).
The lawsuit alleges that the compensation decision was a breach of fiduciary duty because the board failed to ensure Elon Musk’s full-time devotion to his role as CEO of Tesla. His other endeavors include chairing SpaceX, founding The Boring Company, owning Neuralink, and joking that he’ll buy public companies. This Reuters article gives more detail:
The lawsuit in Delaware’s Court of Chancery by shareholder Richard Tornetta alleges the package was unnecessary, since Musk at the time owned 22% of Tesla, giving him plenty of incentive to make the company a success.
Tornetta seeks to cancel the plan, including stock options already granted.
Musk is using his Tesla stock as collateral for loans to buy Twitter.
Musk and Tesla’s directors argued in court filings that the pay package did what it set out to do — align Musk’s incentives with shareholders and create value.
On Twitter, Ann Lipton pointed out that some of the arguments being made int he Twitter litigation could also affect the compensation trial. This compensation case has been overshadowed by other Musk drama, but we’ll be watching for the outcome – and the impact that it could have on CEO arrangements, backing up compensation committee decisions, and drafting proxy disclosures for shareholder votes.
If you’re in the midst of figuring out your pay vs. performance disclosure, join us next month – at our “Proxy Disclosure & 19th Annual Executive Compensation Conferences” – to get your action plan in place. In response to the SEC’s late-August adoption of final rules, we’ve lengthened the duration of our session on “Pay Versus Performance: Key Compliance Steps” – in which FW Cook’s Bindu Culas, Weil Gotshal’s Howard Dicker, Ropes & Gray’s Renata Ferrari and Latham’s Maj Vaseghi will discuss what the final rules require, key compliance steps, and practice pointers & predictions.
As everyone in this space knows, pay vs. performance is only one of the many important topics that are in motion right now. With game-changing new SEC rules that enhance the focus on director skills and board oversight, record numbers of shareholder proposals, and relentless regulatory & investor scrutiny, your proxy disclosures – and the actions that support them – are more important than ever. In 18 virtual panels over the course of 3 days, our Conferences provide practical guidance about rule changes, Staff interpretations, emerging disclosure risks, investor and proxy advisor positions, executive pay expectations, the board’s role, and more. Here’s the full agenda – and here’s more info about our expert speakers.
Here’s who should attend:
– Anyone responsible for preparing and reviewing proxy disclosures – including ESG and executive pay disclosures and responses to shareholder proposals.
– Anyone responsible for implementing executive and equity compensation plans or who counsels or advises boards on their oversight responsibilities, including CEOs, CFOs, independent directors, corporate secretaries, legal counsel, HR executives and staff, external reporting teams, accountants, consultants, and other advisors.
This is truly a “can’t miss” event for anyone involved with proxy disclosures, corporate governance, and executive compensation. You can still register to join us virtually Wednesday, October 12th – Friday, October 14th.
Conference attendees will not only get access to our unique & valuable course materials (coming soon) – we’ll also be making video archives and transcripts available after the conference, so that you can refer back to all of the practical nuggets when you’re grappling with your executive pay decisions, disclosures and engagements. Plus, our live, interactive format gives you a chance to earn CLE credit and ask real-time questions.
Register today! In addition, check out the agenda for our “1st Annual Practical ESG Conference” – which is happening virtually on Tuesday, October 11th. This event will help you avoid ESG landmines and anticipate opportunities. You can bundle the Conferences together for a discount.
Compensation is a key part of CEO succession planning, which – as one of the board’s most important responsibilities – should receive ongoing attention even when no immediate turnover is expected. This 14-page Semler Brossy memo describes questions to ask at each stage of the process:
1. No imminent change – Does compensation for rising stars & potential successors reflect their high value to the company and inspire them to stay?
2. Succession expected in the next two years – Do we need to take any bolder actions for the highest-potential candidates?
3. Just before the succession event – How should the new CEO’s pay be established relative to market and their predecessor?
4. Post-succession – How do we need to change pay to reflect changes in the business priorities & strategy?
The memo also points out that a transition event can be a time to add ESG incentives to executive pay packages or change pay structures for the C-suite as a whole – but all decisions need to be made with an eye to both internal & external scrutiny.
As a complement to our May-June issue of The Corporate Executive newsletter – and as a prelude to our upcoming “Proxy Disclosure & 19th Annual Executive Compensation Conferences” – we’ve now posted the transcript from our recent webcast, “Executive Compensation & Equity Trends in a Volatile Environment.” This program featured Semler Brossy’s Greg Arnold, Compensia’s Mark Borges, MoFo’s Dave Lynn and Gibson Dunn’s Ron Mueller. Here’s a nugget that Mark shared about off-cycle retention awards, which we’ll be discussing more at our Conferences:
I’ve had clients that decided it was in their best interest from a competitive standpoint to provide an off-cycle retention award to one or more of their executives. They granted them a time-based vesting award and they got dinged for it by the proxy advisory firms. That’s something to keep in mind when you’re doing anything that’s off-cycle. Should this be a performance award, to some extent, in order to mollify the proxy advisory firms?
In the spring, I saw many “moonshot,” or front-loaded, awards. This is where a company will grant one or more executives, usually the CEO, an award that is several times larger than what an annual award would be. It’s entirely performance-based. The performance measures are generally stock price triggers or market capitalization goals. I don’t know if that’s going to stop with the market being in the condition that it’s in, but it’s something companies have faced.
Some companies go to shareholders to get approval of those awards. In that situation, it’s the safest way to ensure you’re not going to run into problems with it. The proxy advisory firms have started to take notice of these awards and indicated that they are going to give them extra scrutiny under their pay-for-performance analysis. They’re going to expect things in the awards, such as commitments not to grant additional awards for a certain number of years after the front-loaded award has been made. They’re also looking for a more detailed explanation of the rationale for the award. Why are you doing this? What’s the deliberative process that you went through to arrive at the terms of the award that you’ve granted?
A lot of these were granted without shareholder approval and, to an extent, went without any negative repercussions from the proxy advisory firms. The important thing to keep in mind here is the size of the award. The proxy advisory firms tend to issue negative recommendations on these awards when they think the size is just too much for the company and its circumstances. These awards may be halted temporarily, but they aren’t going away and they are something the proxy advisory firms are starting to focus their attention on.
Greg & Mark went on to discuss that market volatility may make the performance hurdles for these awards extra challenging – and companies & boards might be painted into a corner if they’ve agreed not to make any additional grants.
Norges Bank Investment Management – which operates Norway’s massive sovereign wealth fund with more than 9300 portfolio companies globally – is providing new guidance to companies – specifically, boards – on its expectations for human capital management, including pay equity.
The 7-page expectations were published August 17th and are part of a series of expectations on topics including biodiversity, climate change, tax transparency, human rights, water issues, anti-corruption and more. While Norges is careful to not prescribe a specific HCM approach, they also make it clear that they view HCM and positive treatment of workers as important to fund returns – which depend on the success of the market as a whole. You can feel “double materiality” at work here – a concept that has traction in the ESG space due to EU regulations (here’s an excellent 2-partexplainer on PracticalESG.com, written by our Advisory Board member Donato Calace).
The investment manager also observes social-related HCM trends that are elevating this issue’s importance to financial results: Artificial Intelligence, automation, alternative workforce models (hybrid, temporary, seasonal, gig), societal pressures, inequality, platforms that amplify worker voice, and supply chain issues. Boards should be considering these risks & opportunities and be prepared to discuss them.
Here’s a summary of the key expectations:
– Integrate human capital management into policies and strategy:
– Adopt a human capital management strategy appropriate to your business, with board accountability for its development & implementation.
– Have a proactive and structured approach to promoting DEI across the workforce and, where relevant, the supply chain.
– Have a zero-tolerance policy against all forms of discrimination, violence and harassment, and related trainings.
– Ensure that workers are paid fair wages sufficient to ensure a decent standard of living.
– Offer opportunities for training and professional development, including, where appropriate, lifelong learning and re-skilling.
– Companies that rely on alternative workforce models should ensure their human capital management strategies include this workforce and should account for any material differences relative to the approach taken with direct employees.
– Integrate material human capital management risks into risk management:
– Identify and incorporate material human capital management risks in a robust and integrated risk management framework – where relevant, include clearly defined targets and timelines.
– Integrate DEI and health and safety systematically into risk management frameworks to ensure equitable treatment and risk mitigation in operations and relevant parts of the value chain.
– Have and be open about systems to actively monitor and manage pay equity, including clear definitions and indicators of pay equity and relevant metrics and targets used to measure progress.
– When considering or using new technologies or alternative workforce models (AI, automation, hybrid or gig workers), be particularly aware of related risks and take steps to address these risks.
– Disclose material information related to human capital management:
– Report publicly on your human capital management strategies, policies, processes and risks in a manner appropriate to your business model and operational context. Reporting should be aligned with emerging best practices and international standards, such as SASB/ISSB and GRI, as well as relevant regional disclosure frameworks.
– Provide sufficient context in disclosures to enable investors to assess your HCM-related investments, opportunities and risks. Reporting should cover both direct employees and other categories of workers, such as those in the supply chain and seasonal, part-time and temporary workers.
– Disclose core information on your workforce – such as numbers of workers, total cost of workforce, turnover, and diversity data, as well as relevant industry-specific metrics. Reporting on diversity-related measures should be disaggregated by appropriate gender or minority groups and employee categories.
– Be transparent about how you measure the effectiveness of your HCM strategies. Where appropriate, reporting should use metrics that enable year-on-year comparison and assessment of performance against targets and action plans.
– Engage responsibly and transparently:
– Engage with workers and their representatives – such as trade unions, health and safety representatives and employee resource groups – as part of HCM, including in the development and implementation of policies and practices. Be transparent about your approach.
– Facilitate appropriate channels for worker voice and engagement to strengthen productivity, labour relations, company culture and organisational improvement.
– Maintain grievance and whistle-blowing mechanisms that enable follow-up of complaints without fear of retaliation. Where appropriate, take steps to address inherent barriers to proper representation and access to worker voice channels and grievance mechanisms for women and minority groups.
– Engage responsibly with policy makers and regulators and be transparent about their engagements.
Norges says that these expectations will serve as a starting point for its HCM-related interactions with companies. It urges companies to address this topic in a manner meaningful to their business model – and provide transparent disclosure. The investment manager says it supports continued development of accounting and reporting practices on HCM, and that “corporate balance sheets today generally fail to provide investors with a clear picture of companies’ investments in their human capital.”
We’ll be sharing critical guidance on how to navigate HCM disclosure rules and investor expectations at our “Proxy Disclosure & 19th Annual Executive Compensation Conference” this October. In particular, tune in to our session on “Human Capital Disclosure: Mastering SEC & Investor Expectations” – with Aon’s Pam Greene, Gibson Dunn’s Ron Mueller, CalPERS’ Tamara Sells and Wilson Sonsini’s Amanda Urquiza. Here’s the full agenda for the Conferences – 18 essential sessions over 3 days. Sign up online, email sales@ccrcorp.com, or call 1-800-737-1271.
In a rare court challenge to CEO pay, last week the founders and largest shareholders of a publicly traded hedge fund brought a books & records claim in the Delaware Court of Chancery, claiming that the board “may have breached its obligations to the stockholders by granting a series of escalating compensation awards to James Levin — the current Chief Executive Officer (“CEO”) and Chief Investment Officer (“CIO”)” – who is paid separately for those two roles. They’re seeking emails, texts and other records. Here’s more detail from the complaint:
Mr. Levin has been paid in the 99th-percentile of public company executives even while Sculptor’s market capitalization has fallen in the bottom quartile. As Bloomberg recently recognized, the compensation awarded to him reflected “a staggering amount at a firm with a market value then around $1 billion” and which has since sunk below $560 million.1 The same Bloomberg report identified Mr. Levin as the 14th highest-paid CEO in the country in 2021. Sculptor’s annual revenues, which last year were $626 million, cannot possibly justify, much less support, paying a CEO hundreds of millions of dollars a year. The Company can hardly remain financially viable when such stratospheric payouts are directed to a single executive.
As recently as 2019, the Delaware Court of Chancery denied a high-profile Section 220 request that took issue with executive pay decisions at Facebook – see this Wilson Sonsini memo. If the court finds that the plaintiffs here have a “proper purpose” for this demand, that will mean there’s a “credible basis” from which wrongdoing may be inferred. While it won’t be a definitive sign that the the suspected wrongdoing is actionable under Delaware law, it would be a big hit to the deference that courts usually afford to executive pay decisions.
In addition, even at this early stage, these allegations highlight to other compensation committees “what not to do” if you want to stay on the good side of your shareholders. Here are a few more nuggets from the complaint:
The plaintiffs take issue with the peer groups used to support pay decisions, which differed from the peer group identified in the company’s proxy statement, and with the absence of certain details and lack of employment agreement exhibit in the Form 8-K that was filed to report the compensation.
They also allege as evidence of problematic decision-making that the compensation packages and director responsiveness “have been severely criticized by independent third parties, including Institutional Shareholder Services (“ISS”), Institutional Investor, Citigroup Research, and Bloomberg.” As noted in this Bloomberg article, the shareholders are also alleging that the board has failed to conduct proper succession planning that would reduce the CEO’s “key-man” bargaining power.
Earlier this year, one of the hedge fund’s directors (who has ties to one of the founders who filed this complaint) resigned due to his disagreement about the CEO pay decisions – and of course the plaintiffs leverage points from that disagreement in the complaint. Here is the Form 8-K with correspondence related to that event – and the amended Form 8-K that continued the public conversation. The plaintiffs note that since January 2020, seven directors have vacated their seats – including five who resigned before their terms were supposed to end.