On February 10, 2023, the SEC’s Division of Corporation Finance (Corp Fin) issued 15 compliance and disclosure interpretations (CDIs), Questions 128D.01 through 128D.13, and Section 228D – CDIs 228D.01 and 228D.02. The CDIs are wide ranging and include, among other things, confirmation that pay versus performance disclosure is not required to be included in a Form 10-K, guidance relating to equity awards granted to a first-time named executive officer (NEO) in a year prior to (and not otherwise related to) their appointment as a NEO, clarification as to which of the periods presented should include footnote disclosure of the amounts deducted and added to compensation actually paid, and confirmation that a company may use its Compensation Discussion and Analysis (CD&A) peer group, assuming this peer group is actually used by the company in determining executive pay, even if this peer group is not used for “benchmarking” as this term is explained in CDI 118.05.

Continue Reading Corp Fin Issues Pay Versus Performance CDIs

Our recent Client Alert discusses applicable rule changes, guidance, and disclosure considerations for the 2023 proxy season for public companies, as well as reminders for what is on the horizon for public company governance and disclosure. Our annual client alert covers the following topics:

Continue Reading Preparing for the 2023 Proxy Season

We are pleased to present our 2022 Delaware Corporate Law and Litigation Year In Review.

Amid a broader cooldown in the markets, 2022 nonetheless proved to be a significant year with respect to developments in Delaware corporate law and practice. The Delaware courts issued scores of opinions relevant to those in corporate practice and oversaw some of the most high-profile (and exciting) litigation in years. In addition to case law developments, the General Corporation Law of the State of Delaware (DGCL) was amended on August 1, 2022, in several significant ways. Meaningful developments also occurred in the composition of the Delaware courts.

Continue Reading 2022 Delaware Corporate Law and Litigation Year in Review

Partner and Editorial Board member Amy Simmerman joined Diligent Institute to discuss the importance of board minutes. She shared insights on why board minutes matter, what is important to see in board minutes (including striking a balance with a contextually appropriate level of detail), and considerations and best practices relating to other written and electronic records, such as emails, texts, notes, and the use of board portals.

Continue Reading Inside Today’s Boardrooms | The Growing Importance of Corporate Board Minutes

Our Client Alert discusses a recent decision by the Delaware Court of Chancery in which the court determined that officers (not just directors) owe a fiduciary duty of oversight under Delaware law. The case, In re McDonald’s Corporation Stockholder Derivative Litigation, involved derivative claims asserted by stockholders of McDonald’s against its board of directors and certain officers, including its former Chief People Officer, who was the subject of the court’s decision resolving his motion to dismiss the claims against him. The court’s decision clarifies an important but previously uncertain area of Delaware law pertaining to officers’ fiduciary duties. Significantly, the court also concluded that sexual harassment committed by the executive was itself a breach of his fiduciary duty of loyalty.

Continue Reading Delaware Court of Chancery Concludes That Duty of Oversight Applies to Officers

On January 27, 2023, the SEC’s Division of Corporation Finance (Corp Fin) published four new Compliance and Disclosure Interpretations (CDIs) relating to the SEC’s recently adopted clawback rules. Please refer to our previous Client Alert for more information on the clawback rules. These new CDIs address what had been an outstanding question relating to upcoming disclosure obligations, as well as a few other clarifications.

Continue Reading Corp Fin Publishes New CDIs on Clawback Rules – Addresses Cover Page Check Boxes

In recent weeks, the Delaware Court of Chancery has issued two noteworthy opinions in the special purpose acquisition company (SPAC) context—one related to fiduciary duties and one related to the technical question of when a class or series of stock is entitled to its own separate vote on a charter amendment. These opinions provide valuable insight into how the courts may view common elements of de-SPAC transactions and also have broader implications for practice. A summary of the court’s key holdings is below.

Continue Reading Delaware Court of Chancery Issues Two Opinions in the SPAC Context

10b5-1 SEC Updates

Partner and Known Trends Editorial Board member Richard Blake joins Rich Baker, Executive Director at Morgan Stanley Executive Financial Services, for a discussion on “10b5-1 SEC Updates.” Their conversation will address the recent amendments to Rule 10b5-1, including implications for Rule 10b5-1 guidelines and plans.

Wednesday, January…

Continue Reading Webinar Alert | 10b5-1 SEC Updates, January 25

In our recent Client Alert, we provide a look back at 2022, a review of the universal proxy rules, and considerations for shareholder engagement in 2023. Shareholder engagement runs the gamut from preparing for successful quarterly earnings calls to engaging with shareholders directly. Although there is no “one-size-fits-all” approach, we believe that effective shareholder engagement involves a combination of some or all of the following factors:

Continue Reading Shareholder Engagement: Looking Ahead to 2023

The U.S. Securities and Exchange Commission (SEC), under Chair Gary Gensler, has a robust rulemaking agenda with substantial new governance and disclosure requirements and proposed requirements. In 2022, the SEC approved a number of proposed and final rules, which, in many cases, provided for relatively short public comment periods and…

Continue Reading How Long Does It Usually Take for SEC Rules To Be Published in the Federal Register?