September 29, 2005

Recent Developments in Delaware Entity Law

Like he has done over the past several years, in this text interview, Lou Hering of Morris Nichols covers how the Delaware legislature recently enacted a number of amendments to three of Delaware’s four “alternative entity” statutes in its latest legislative session.

Senator Frist and Insider Trading

Bound to be gobs and gobs of media coverage – some of it with questionable legal analysis – regarding the SEC’s probe into trades conducted by Senator Frist through some blind trusts. An article in today’s WSJ reported that the matter is now a formal investigation. Professor Bainbridge in his blog provides his own insights into the viability of a possible violation.

Survey Results from Shearman & Sterling

Recently, Shearman & Sterling released its annual survey on corporate governance practices of the 100 largest U.S. public companies (the survey is posted on Among the trends revealed by the survey:

– Poison pills and staggered boards are in decline. The number of companies with poison pills fell by 19%, and the number of companies with a staggered board fell by nearly 30%.

– A majority of companies continue to exceed the minimum independent director requirements of the NYSE and Nasdaq.

– Despite substantial attention to the issue, there has been little change in the number of companies at which different individuals serve as chairman of the board and chief executive officer (19%, up from 14% in 2003).

– Grants of stock options as a component of director compensation decreased to 55% from 70% in 2003.

– The number of shareholder proposals for majority voting in director elections has seen the largest increase, from no such proposals included in the proxy statements of the Top 100 companies in 2003 to 15 such proposals in 2005, fueled primarily by the demise of the SEC’s proxy access proposed rule.