Category

Section 16(b)

Category

We have been following the progress of a number of plaintiff shareholder suits alleging Exchange Act Section 16(b) short swing profits based on “discretionary” share withholding on equity awards. Just under a year ago we were happy to report the first district court dismissal of one of these claims, although that case is currently on appeal to the Fifth Circuit. On January 26, 2018, a second such claim was thrown out via summary judgment, this…

In the world of comp lawyers, this is the time of year when every day’s to do list includes a review of one or more (sometimes, many more) equity award agreements in need of an annual update. In view of recent events in the world of plaintiff shareholders, one of the areas we’re homing in on this year is the award agreement’s tax withholding provision and its level of discretion around whether or not shares will be withheld for taxes.