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CALIFORNIA CORPORATE & SECURITIES LAW

Can A Corporation Be An Officer?

William & Mary Law Review recently published Professor Stephen Bainbridge’s article, Corporate Directors in the United Kingdom.  The abstract begins with the following observation: In the United States, state corporation law uniformly provides that only natural persons may serve as directors of corporations. I haven’t surveyed every state, but I concur as to California and Nevada. …

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Hiring & Firing Officers In California

John Jenkins at The Mentor Blog addresses the question of who has authority to hire and fire officers?  He notes: The bottom line is that that the Board always has that authority. That’s because Delaware 141 says “the business and affairs of every corporation organized under this chapter shall be managed by or under the…

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The Fundamental Distinction Overlooked By The SEC

Yesterday marked the close of the comment period on the SEC’s proposed incentive compensation clawback rules.  You can read my comments here.  The proposed rules are fundamentally flawed because the SEC failed to recognize that different bodies of law apply to officers and employees. Although it should go without saying, not every officer is an…

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Conduct Unbecoming Of An Officer And An Employee?

In proposing executive compensation recoupment rules, the Securities and Exchange Commission either overlooked or failed to recognize an important legal distinction.  The proposed rules would require national securities exchanges and national securities associations to establish listing standards requiring each issuer to develop and implement a policy providing for the recovery, under certain circumstances, of incentive-based compensation based on financial…

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Should The Articles Of Incorporation Define “Officers”?

Today’s post is devoted to what may seem an unlikely question: should the articles of incorporation define “officers”?  This is an unlikely question because it is the bylaws that typically identify the titles of officers and their duties.  Cal. Corp. Code § 312(a).  Nevertheless, it occurs to me that in at least one circumstance, a…

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Is The Chairman Of The Board A Corporate Officer?

One of the principal distinctions between corporate officers and directors is that officers have the authority of autonomous action as corporate agents while directors must act collectively.  As discussed in “Worlds In Collision – Agency Law And A Director’s Fiduciary Duties“, a director qua director is generally not an agent of the corporation and neither is the board…

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