In a recent post (here), The D & O Diary examined the SEC’s decision not to pursue an enforcement action against the outside directors of the Hollinger International and examined what this move might suggest about the potential liability and enforcement action exposure for outside directors of companies caught up in the options
Compensation Consultant Named as Options Backdating Lawsuit Defendant
Shareholders suing Cablevision Systems over its backdated options have amended their complaint to add the company’s former compensation consultant as a defendant. According to news reports (here), the allegations against Lyons Benenson & Co., the company’s former compensation consultant, are the first in the nation to accuse a compensation advisor of taking part
Regulatory Reform: Solving a Problem or Introducing a Weakness?
The Committee on Capital Markets Regulation (or the "Paulson Committee" as the group has come to be known) is scheduled to release its recommendations later this week, on November 30. The Paulson Committee is concerned with the competitiveness of the U.S. securities exchanges in the global marketplace, and the perceived inability of the U.S exchanges
SOX Clawback, Executive Compensation, and Attorneys’ Fees Recoveries
A November 20, 2006 Wall Street Journal article entitled “Companies Discover It’s Hard to Reclaim Pay from Executives” (here, subscription required) details the difficulty that companies are having in their attempts to compel executives to return compensation they didn’t really earn because, as a result of later restatements, the company didn’t actually hit
A “Modest Proposal” for Securities Litigation Reform
As The D & O Diary has previously noted (most recently here), the attempts by the Paulson Committee to propose ways to improve the competitiveness of the U. S. securities exchanges in the global marketplace may include securities litigation reform. Interest in the Committee’s reform efforts increased substantially as a result of media reports
The “Buyout Boom” and D & O Claims
The D & O Diary has previously noted (most recently here) the problems that can arise in connection with “going private” transactions in which management teams up with outside investors to buy out public shareholders’ interests. The latest example may be Clear Channel Communications’ November 16, 2006 announcement (here) that a group
Options Backdating Web Notes
Lucky CEOs: A new study by three leading academics claims to establish a link between governance practices and questionably timed stock options to chief executives. A November 16, 2006 study entitled “Lucky CEOs” (here) by Lucian Bebchuk of Harvard Law School, Yaniv Grinstein of Cornell, and Urs Peyer of INSEAD, examined
U.K. Enacts New Directors’ Duties Law
On November 8, 2006, a sweeping bill affecting U.K. companies went into affect when the Companies Bill, which at 696 pages is Britain’s longest piece of legislation, received royal approval. (The House of Lords site reflecting all information pertaining to the Bill may be found here.) The Bill contains a statutory statement of directors’
Share Buybacks and D & O Risk
One of the most noteworthy corporate phenomena of recent months has been the increasing prevalence of companies buying back their own shares. According to an article in the New York Times (here, subscription required), the S & P 500 companies are on a pace to repurchase more than $435 billion worth of their
Individuals’ Contributions to Securities Lawsuit Settlements
As The D & O Diary has previously noted (here), one of the questions following the Enron and WorldCom civil class actions settlements was whether those settlements’ requirement of individual defendants’ contribution to settlement without recourse to insurance or indemnity represented a trend or an aberration. Several recent high-profile securities lawsuit settlements involving