Delaware Supreme Court Decision Subjects Stockholder-Approved Director Discretionary Compensation Plans to Challenge, Even If They Provide “Meaningful Limits”—Investor Bancorp

By: Warren S. de Wied, Steven Epstein, Arthur Fleischer, Jr., David J. Greenwald, Adam Kaminsky, Scott B. Luftglass, Philip Richter, Robert C. Schwenkel, Peter L. Simmons, Gail Weinstein

Investor Bancorp, issued by the Delaware Supreme Court on Dec. 13, 2017, is an important decision that may result in challenges to compensation that has been awarded to directors pursuant to existing discretionary equity plans; and the decision is likely to affect the structure of equity plans that are adopted going forward. In the attached Fried Frank M&A Briefing, we discuss the decision and its likely impact. We also offer practice points for minimizing the risk of liability with respect to existing plans and outline some structuring possibilities for new plans.

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