TheCorporateCounsel.net

Likely to happen even before the Disney case’s appeal is decided by the Delaware Supreme Court, another executive compensation lawsuit is headed to trial in the Delaware Court of Chancery. This trial is calendared for February 2006 before Vice Chancellor Lamb – and results from the former CEO and COO of Valeant Pharmaceuticals receiving cash bonuses upon spinning off a subsidiary of the company.

The company is alleging that the two men breached their fiduciary duties of loyalty and good faith and unjustly enriched themselves, among other charges, by granting and paying themselves and other directors and officers approximately $48 million as a cash bonus at the completion of an IPO of a minority interest in one of the company’s subsidiaries.

More information, including a copy of the Second Amended Complaint filed against the company’s former Chairman/CEO and its former COO/Director, is posted on CompensationStandards.com in the “Hot Box” on the home page.

In addition, don’t forget that our “2nd Annual Executive Compensation Conference” will open with a panel on director duties and liabilities featuring Delaware Supreme Court Chief Justice Myron Steele; Delaware Vice Chancellor Stephen Lamb; and Professor Charles Elson, Director of the U. of Delaware Center for Corporate Governance.

Updated Majority Vote Chart

Fyi, we continue to update our “majority vote chart,” which lists those companies that have adopted some form of voluntary corporate governance guideline regarding the tendering of a director resignation in the event a majority of votes are withheld from that director. Companies that recently have taken the step of adopting some version of this guideline include Microsoft, Wells Fargo, Avnet, Gap and United Technologies.

Last week, the ABA Director Voting Task Force issued a press release indicating it has received 36 comment letters and that its next meeting is set for early December (and that companies adopting voluntary guidelines is a positive development). The press release claims the comment letters are posted and provides a URL – but it doesn’t work.

I am speaking on this topic today at the Society’s Chicago Annual Chapter Meeting. Next week, I will be providing analysis about the legal consequences of adopting voluntary guidelines regarding director resignations.

Webcast Transcript on ’33 Act Reform and Seasoned/Unseasoned Issuers is Up!

We have posted the transcript for the webcast: “Drilling Down: Seasoned/Unseasoned Issuers and Voluntary Filers Doing Offerings After the ’33 Act Reform.”