The NASPP Blog

Our popular “Meet the Speaker” series, featuring interviews with speakers at the 24th Annual NASPP Conference, is great way to get to know our many distinguished speakers and find out a little more about their sessions in advance of the Conference.

For today’s “Meet the Speaker” interview, we feature Doreen Lilienfeld of Shearman & Sterling, who will lead the session “Shining a Spotlight on Director Compensation”

Here is what Doreen had to say:

NASPP: Why is the topic of director compensation particularly timely right now?

Doreen: Although director compensation rarely receives the same attention paid to executive compensation, recent high profile decisions in the Delaware courts have placed it in the spotlight. Companies that fail to adhere to the procedures for shareholder ratification of director compensation provided for in these decisions may find their directors in the crosshairs of a plaintiffs’ attorney claiming breach of fiduciary duty.

NASPP: What is a common mistake companies make with awards to directors and how can they avoid this?

Doreen: Many companies provide for an annual limit on director compensation grants in their equity compensation plans. Previously, these companies were able to take the position that approval of the equity compensation plan also equated to shareholder ratification of the director equity grants. In many of these plans, however, the annual limit is not meaningful or specific and, therefore, the Delaware Courts have held that no shareholder ratification has taken place. Companies can avoid this problem by amending their plans to include meaningful limits if they think the risk of litigation is high.

NASPP: What is the silver lining?

Doreen:  Although plaintiffs’ lawyers now view director compensation as a new avenue to extract payments from companies, these lawsuits can be easily avoided through proper planning. Including meaningful limits on director compensation awards in equity compensation plans that are put to a shareholder vote will ensure that directors continue to be protected by the business judgment rule.

NASPP: What is something people don’t know about you?

Doreen: I’m renovating a landmarked Harlem brownstone built at the turn of the last century from the ground up while living in it!

Don’t miss Doreen’s session, “Shining a Spotlight on Director Compensation,” at the NASPP Conference!

About the NASPP Conference

The 24th Annual NASPP Conference will be held from October 24-27 in Houston. This year’s program features close to 100 sessions on today’s most timely topics in stock and executive compensation; check out the full agenda and register today!