The Harvard Law School Corporate Governance Blog has a post here that discusses two recent (non-Delaware) cases that address the intersection of federal and state law in the area of corporate governance, regarding the business judgment rule and the recent federal say-on-pay regulations. The introduction to the post follows:
Over 40 companies received negative say-on-pay advisory votes in 2011, the first year for those votes under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Act”). Despite the advisory nature of the votes and the Act’s helpful language that they are not intended to affect director fiduciary duties, at least ten derivative lawsuits have been filed after failed votes. Two present an interesting contrast insofar as they address the “business judgment rule” and the requirement of pre-suit demand in the context of executive compensation.