Much Ado About 'Say-On-Pay'

Law360, New York (June 18, 2013, 12:56 PM EDT) -- In 2010 and 2011, after the enactment of federal “say-on-pay” legislation in the Dodd-Frank Wall Street Reform and Consumer Protection Act[1], shareholder plaintiff firms filed several actions alleging breaches of fiduciary duties by directors of companies experiencing unfavorable say-on-pay votes during proxy season. The suits sought to convert a general signal of shareholder dissatisfaction communicated in these nonbinding advisory votes into an implication of fiduciary malfeasance.

While a few initial suits settled, the majority were dismissed, with courts noting that Dodd-Frank’s say-on-pay provisions expressly do not...
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