Dykema Gossett PLLC - Robert B. Murphy and Mark A. Metz

The rise in shareholder activism has resulted in the addition of a significant number of new directors to public company boards who receive, in addition to the public company’s standard director compensation, additional compensation from the activist shareholder who sponsored their appointment to the board. In response to recent concerns relating to the potential conflicts presented by such compensation and the lack of relevant disclosure, Nasdaq recently implemented a new rule requiring disclosure of these “golden leash” arrangements for companies with securities listed on Nasdaq. Effective August 1, 2016, each Nasdaq-listed company is required by Rule 5250(b)(3) to disclose annually, in its proxy or information statement in connection with its next shareholders meeting at which directors are elected or on its website, all compensation or other payments by third parties to any nominee or director in connection with their candidacy for or service on the company’s board of directors. Read More