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Corporations Keyed to O’Kelley
In re Investors Bancorp, Inc. Stockholder Litigation
Citation:177 A.3d 1208 (2017)
Plaintiffs are stockholders of Investor Bancorp. Inc. and were stockholders at the time of the awards challenged in this case. The board sets director compensation based on recommendations of the Compensation and Benefits Committee, composed of seven of the ten non-employee directors. In 2014, the non-employee directors were compensated by a monthly cash retainer, cash awards for attending board and board committee meetings and personal benefits. In 2014, Cummings, the company’s president and CEO, received a $1,000,000 base salary; an annual cash incentive award of up to 150% of his base salary; and benefits valued at $278,400. At the end of 2014, the Committee met to review 2014 director compensation and set compensation for 2015. The committee presented compensation package to the executive. The board awarded themselves 7.8 million shares. Non-employee directors each received 250,000 stock options and 100,000 restricted shares. According to the complaint, the total value of the awards was $51,653,997. After the company disclosed the awards, stockholders filed three separate complaints, alleging breaches of fiduciary duty by the directors for awarding themselves excessive compensation.
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