Want your annual meeting to go off with no trouble? Pay up

by Walter Olson on February 20, 2013

The Economist on an unplanned (at least one hopes it was unplanned) effect of Dodd-Frank:

THE Dodd-Frank law of 2010 requires a “say-on-pay” vote for shareholders of American companies. Clever lawyers scent a payday for themselves.

One law firm in particular, Faruqi & Faruqi, has filed a series of class-action suits demanding more information about how companies decide what to pay their senior executives. It seeks to prevent its targets from holding their annual meetings until the extra information turns up. One such suit, against Brocade Communications, a Californian company, forced the suspension of the annual meeting last February. Brocade quickly settled. Faruqi’s fees were $625,000. Several other companies, not wanting to delay their meetings, have settled similar suits.

Prof. Bainbridge is reminded of the specialized group of non-lawyers in Japan known as sokaiya, who extract money from target companies by threatening (among other things) to disrupt annual meetings.

{ 3 comments }

1 BobN 02.20.13 at 6:43 pm

And this is different than paying protection to Tony Soprano, how?

2 John Fembup 02.20.13 at 11:29 pm

That’s a nice convention schedule you got there.

Hate to see it messed up, y’know ?

3 oooorgle 02.21.13 at 11:08 am

Synonymous with Taxation.

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