Richards Layton & Finger

Investors Bancorp: Structuring and Approving Non-Executive Director Compensation to Avoid Judicial Review

November 7, 2018

In the recent Investors Bancorp case, the Delaware Supreme Court clarified that advance stockholder approval of a compensation plan may only “ratify” future grants if the plan is self-executing, i.e., it left the board with no discretion, and enumerated specific grants or a formula for calculating specific grants. The authors discuss the case and, in light of it, suggest steps in structuring and approving plans that directors may take to avoid protracted stockholder litigation.