CalPERS And Pay Equity

The Securities and Exchange Commission has given notice of its intent to adopt final pay ratio disclosure rules at its meeting next week.  In applauding the SEC’s proposed rules, the California Public Employees’ Retirement System observed: Finally, we believe the ratio will be a number which prompts commentary and discussion, providing an important data point

Senate Appropriations Committee Is Next Stop For California Finders Bill

AB 667 (Wagner) continues to wend its way through the California legislature.  The bill, which was sponsored by the Corporations Committee of the Business Law Section of the California State Bar, defines a finder as a natural person who, for direct or indirect compensation, introduces or refers one or more accredited investors, as that term

California Crowdfunding Bill In Suspense

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Yesterday, Broc Romanek published several posts regarding crowdfunding.  Meanwhile here in California, crowd funding has stalled in the legislature.  AB 722 (Perea) passed unanimously out the Assembly Committee on Judiciary and on a 9-2 vote out of the Assembly Committee on Banking and Finance.  Assembly Members Travis Allen, a Republican, and Mark Stone, a Democrat, voted against

CalPERS Claims Success; Proxy Monitor Says CalPERS Success Leads To Lower Stock Prices

“Fair is Foul, and Foul is Fair” In this press release issued last week, CalPERS congratulated itself on the “success” of its proxy voting initiatives: The California Public Employees’ Retirement System (CalPERS) made significant progress during the 2015 proxy season, where it voted to improve the rights of shareholders to nominate corporate directors – commonly referred

Court Declines To Declare “S” Corporation Shareholders’ Agreement Unenforceable

In general, shareholders of a corporation that has elected to be taxed under Subchapter S of the Internal Revenue Code are taxed on corporate profits regardless of whether the corporation makes any distribution of those profits to its shareholders.  Obviously, paying taxes on income that isn’t actually received can be a problem for many shareholders.

When It Comes To Director Compensation, California Is Not Delaware

Yesterday, I wrote about my disagreements with the approach to director compensation adopted by the Delaware Court of Chancery in Calma v. Templeton, 114 A.3d 563 (Del. Ch. 2015) and Seinfeld v. Slager, 2012 Del. Ch. LEXIS 139 (June 29, 2012).  In both cases, the Court ruled that the rigorous “entire fairness” standard of review applies to director’s who receive grants

No Calm In Delaware After Calma v. Templeton

In derivative suits, cases are essentially lost and won at the motion to dismiss stage.  Unless the defendants succeed in winning dismissal, they must confront an unhappy choice between continued litigation with all of its costs and risks or a settlement that “feeds the bulldog”.  Thus, the Delaware Court of Chancery’s rulings in Calma v. Templeton,

Out-of-State M&A Lawyer Can Be Sued In California

Many M&A transactions are negotiated across state lines.  When an out-of-state lawyer misrepresents facts in a phone call and email to a lawyer in California, do those communications render the foreign lawyer amenable to suit in California?  In essence, that was the question presented to the Sixth District Court of Appeal in Moncrief v. Clark, Cal. Ct.

Does The SEC Know How To Assess Risks And Rewards?

The Securities and Exchange Commission’s proposed rules governing stock exchange listing standards governing recovery of erroneously awarded compensation cause me to wonder whether the SEC understands how to assess risks and rewards. Proposed Rule 10D-1(b)(1)(iv) would require an issuer to recover such compensation in compliance with its recovery policy “except to the extent that it

Implementation Issues Abound For The SEC’s Proposed Clawback Rules

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When adopted, the incentive compensation clawback rules recently proposed by the Securities and Exchange Commission are likely to present issuers with a number of implementation challenges.  Some of these challenges have been discussed in prior posts.  Below is a brief outline of just a few of the many and multifarious headaches that I foresee for