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CALIFORNIA CORPORATE & SECURITIES LAW

California Court Of Appeal Affirms Dismissal Of Say-On-Pay Suit

Yesterday, a panel of the California Court of Appeal added to the growing list of opinions rejecting suits triggered by failed say-on-pay votes.  Some may be surprised that this case, which involves a Delaware corporation, was in the California courts of all, but the Ninth Circuit has held that the Dodd-Frank Act’s say-on-pay mandate did not by itself confer…

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Ninth Circuit Says Say-On-Pay Suit Should Stay In California Court

In enacting the Dodd-Frank Act, Congress made it clear to everyone, other than the plaintiffs’ bar, that say-on-pay votes were advisory only, did not create or imply any change in fiduciary duties of directors, or create or imply any additional fiduciary duties of directors.  15 USCS § 78n-1. In the eyes of the plaintiffs’ bar,…

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It’s Time To Respect The Views Of The Indifferent!

Although Broc Romanek recently reported that so far this year 43 companies have failed  to achieve majority support for “say-on-pay”, the reality is that this is a miniscule percentage of the total number of publicly traded companies. Moreover, even failure can be a matter of perspective.  In one of the recent cases cited by Broc, the…

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Without Knowing The Reasons, Issuers Can’t Take Account Of Say-on-Pay Votes

The recently completed proxy season has yielded a virgin crop of shareholder “say-on-pay” votes, as required by Section 951 of the Dodd-Frank Act.  Although not required by Congress, the Securities and Exchange Commission amended Item 402(b)(1) of Regulation S-K to require an issuer to address in its Compensation Discussion and Analysis whether and, if so, how its compensation policies…

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SEC Rule 14a-21(b) – An “Extraordinary Injustice” To Shareholders?

When the Securities and Exchange Commission was considering the adoption of its say-on-pay rules, I submitted this comment letter recommending that issuers be given flexibility to adopt voting procedures that they determine to provide the most effective means of assessing shareholder preferences.  The SEC staff declined to follow my recommendation.  Instead, the SEC adopted a rule, Rule 14a-21(b),…

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California Comments On Crescent City Corporate Conference

Last week, I attended the 23rd Annual Corporate Law Institute sponsored by Tulane University Law School. Here are some notes. Who Came The Institute drew a crowd of nearly 400 people, including about two dozen reporters.  Reportedly, Bloomberg, Reuters, The Wall Street Journal and others had representatives attending the Institute. Who Spoke The panels were…

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Man Bites Dog: SEC Staff Overrules Congress

Yesterday, Broc Romanek reported in his blog that the Securities and Exchange Commission staff has posted several new Compliance and Disclosure Interpretations with respect to Say-on-Pay.  In particular, I noted that the staff disagrees with Congress. New Section 14A(a)(2) of the Securities Exchange Act of 1934 as added by Section 951 of the Dodd-Frank Act provides (emphasis added): FREQUENCY OF…

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Why Is There No Withhold Box?

The Securities and Exchange Commission has long required that a form of proxy relating to matters other than election to office provide a means to specify by boxes a choice between approval or disapproval of, or abstention with respect to, each separate matter to be voted on at the meeting.  Rule 14a-4(b)(1).  More recently, the SEC in…

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Video: Say On Pay: The Dodd Frank Act Challenges Executive Compensation

Watch the video The Dodd-Frank Act requires companies subject to the Securities and Exchange Commission’s proxy rules to hold advisory votes on executive compensation.  In several prior posts, I’ve written about some of the specific issues and questions involved.  In this video blog, I take a step back and speak more generally about the challenges…

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More On Say-On-Pay Voting

In yesterday’s post, I make the point that the Dodd-Frank Act requires issuers to include a resolution in their proxy statement regarding the frequency of say-on-pay advisory votes.  Because the vote on this resolution is advisory only, some issuers appear to be taking the position that they don’t have to apply the “normal” rules to…

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