Davis Polk Discusses Reopening of Comment Period for SEC’s Dodd-Frank Clawback Rule

On June 8, 2022, the Securities and Exchange Commission announced that it is again reopening the comment period for its proposed clawback rule, a rule that has been required to be promulgated since the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. This new comment period is the SEC’s third request for comments on the clawback rule, with comments previously requested on proposals published in July 20151 and October 20212. As part of this reopening, which did not include a new version of the proposed rule, the SEC Staff released a … Read more

New Year’s Resolutions for Director Compensation from Investors Bancorp

In recent years, shareholder plaintiffs have brought a series of claims before the Delaware Court of Chancery alleging that directors of Delaware companies have abused their discretion in granting themselves excessive equity compensation for their board service.  These cases raised the threshold question of whether the plaintiffs’ challenges should be reviewed under the “entire fairness” standard, which requires the company to bear the burden of proving that the director awards were fair, or the more deferential “business judgment” standard, which grants considerable discretion to directors’ decisions, often resulting in dismissal of claims that fail to plead particularized facts indicating fiduciary … Read more