Tag Archives: equity compensation

A recent case offers a fresh reminder that directors must satisfy their fiduciary obligations when setting their own compensation.

In a derivative action against the non-employee directors of OvaScience, Inc., a stockholder alleged that the non-employee directors had breached their fiduciary duties and wasted corporate assets by paying themselves excessive compensation.  In 2015, for example, all of OvaScience’s non-employee directors received compensation of at least $300,000 (substantially all of which represented the fair value of equity awards granted during the year),… More

A recent SEC enforcement action should serve as a potent reminder to pre-IPO and other private companies that SEC rules sometimes impose affirmative disclosure obligations on private companies that offer and sell securities to their employees.

Most well-advised start-ups and other emerging companies know that they need an exemption from the registration requirements of the Securities Act of 1933 in order to grant options or issue other equity awards to their employees.… More

Public companies commonly use their equity as a component of incentive compensation awarded to their executives and other employees.

Under Nasdaq Listing Rule 5635(c), prior stockholder approval is generally required before a listed company may issue shares under an equity compensation plan or other arrangement.  To satisfy this requirement, public companies typically adopt and obtain stockholder approval of an incentive plan that provides for a reserve of shares that may be issued pursuant to various enumerated types of awards.… More