Designing equity compensation plans in a manner that violates the executives' Fiduciary Duties to Shareholders

Most companies have equity compensation plans that are designed to allow top executives to trade on inside information in violation of section 16(b) of the 1934 Securities Act.

The executives and the company attorneys then refuse to enforce section 16(b) against the executive violators. This constitutes a violation of the executive's Fiduciary duties to the shareholders.

Very few attorneys understand section 16 (b). And the ones that do have an understanding, usually defend the top executives and their companies. This is especially the case where the equity securities are derivatives.

The writer of this article has enforced section 16 (b) of the Securities Exchange Act of 1934 against more executives that any other plaintiff or attorney. He was the volume leader on the CBOE in Chicago for several years and wrote a book "Getting Started in Employee Stock Options" published by Wiley and Sons.

More to follow

Edited Sun, Jul 14, 2019 11:16 AM

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