Does A Director Have A Contractual Right To Compensation?

Yesterday, I wrote about stockholder challenges to director compensation.  Today’s post considers what happens when a director joins a board.  When someone is invited to join a board, she may ask about compensation.  The company may refer the candidate to the disclosure regarding compensation in the company’s proxy statement.  When the candidate agrees to join

When It Comes To Director Compensation Claims, Nevada And Delaware Are Fundamentally Different

Since 1969, there has no question that directors of a Delaware corporation have the authority to set their own compensation.  8 DGCL § 141(h).  Having authority to do something, however, doesn’t mean that the use of that authority won’t be challenged, as was illustrated by newly appointed Chancellor Andre G. Bouchard’s ruling last month in Cambridge Ret. Sys.

Nevada Exculpation Statute Leads To Dismissal Of Claims Against Erstwhile Officer

Nevada, unlike either California or Delaware, exculpates corporate officers from liability to the corporation for any damages as a result of “any act or failure to act” in his or her capacity as an officer unless it is proven that (i) the officer’s action or failure to act constituted a breach of his or her

This International Shoe Doesn’t Fit: Subsidiary May Not Be Parent’s Agent

Is a wholly-owned subsidiary per se an agent of the parent?  In an opinion issued yesterday, the Nevada Supreme Court answered “not necessarily”.  The legal issue was whether the German parent of a Delaware corporation doing business in Nevada was subject to the jurisdiction of the Nevada courts.  Viega GMBH v. Eighth Judicial Dist. Court, 130

Delaware Court Rules Nevada Law Governs But Applies Delaware Law

Although there are many significant differences between the corporate laws of Nevada and Delaware, the Nevada Supreme Court has often looked across the country to Delaware.  Thus, the Nevada high court has adopted Delaware’s test for demand futility articulated in Aronson v. Lewis, 473 A.2d 805 (Del. 1984) (overruled in part on other grounds by Brehm v. Eisner,

If It’s An LLC, Why Cite Corporate Law?

I continue to be surprised when courts refer to state laws governing corporations when the subject entity is a limited liability company.  A recent example of this confusion can be found in Piatelli Co. v. Chambers, 2014 U.S. Dist. LEXIS 1556 (D. Nev. Jan. 7, 2014).  That case involved a dispute over whether an agreement had been approved by

Is Nevada Free-Loading On The SEC?

Nevada’s corporate law continues to attract attention from the academic community.  In a recent paper, three professors of accounting at West Chester University of Pennsylvania undertook a forensic examination of Nevada’s place in the market for corporate charters. Cataldo, A. J., Fuller, L., & Miller, T. (2014).  An Analysis of SEC and PCAOB Enforcement Actions against Engagement

Why October 1, 2014 Is An Important Date For Management Persons Of Nevada Entities

Two years ago, the Nevada Supreme Court in an en banc decision held that a state district court may exercise jurisdiction over the nonresident officers and directors of a Nevada corporation with its principal place of business in Spain.  Consipio Holding, BV v. Carlberg, 282 P.3d 751 (Nev. 2012).  The Supreme Court reasoned When officers

“Don’t tell me not to worry, and please don’t call me partner.”

How many websites and marketing materials have you seen that identify a company’s suppliers and other vendors as “partners”?  Does this mean that the company actually intends to communicate that it has formed a legal partnership with the named suppliers and vendors?  In most cases, probably not.  So, why would a company describe its vendors

Joint Venturer May Be Partner By Estoppel

Benjamin Disraeli is often credited with saying “With words we rule men”.  I haven’t found a source for that particular quotation.  Even if he never uttered or wrote those words, I like the quote and the idea that the former prime minister may have said them. A case handed down this week by the Nevada