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Full-Text Articles in Law
Wasting The Corporate Waste Doctrine: How The Doctrine Can Provide A Viable Solution In Controlling Excessive Executive Compensation, Steven Clayton Caywood
Wasting The Corporate Waste Doctrine: How The Doctrine Can Provide A Viable Solution In Controlling Excessive Executive Compensation, Steven Clayton Caywood
Michigan Law Review
In the midst of the global recession of the late 2000s, there was an outcry against corporate executives and what the public deemed to be their excessive compensation. Although this anger is still featured in today's headlines, it is nothing new. In fact, excessive executive compensation complaints arose when the very concept of a corporation was still new. Most of the complaints that the public has leveled have had little effect on boards of directors' decisions. Occasionally, however the outcry is so great that the public compels a company's leadership to take action. This happened early in 2009 when American …
Rewarding Outside Directors, Assaf Hamdani, Reinier Kraakman
Rewarding Outside Directors, Assaf Hamdani, Reinier Kraakman
Michigan Law Review
While they often rely on the threat of penalties to produce deterrence, legal systems rarely use the promise of rewards. In this Article, we consider the use of rewards to motivate director vigilance. Measures to enhance director liability are commonly perceived to be too costly. We, however demonstrate that properly designed reward regimes could match the behavioral incentives offered by negligence-based liability regimes but with significantly lower costs. We further argue that the market itself cannot implement such a regime in the form of equity compensation for directors. We conclude by providing preliminary sketches of two alternative reward regimes. While …
Reverse Monitoring: On The Hidden Role Of Employee Stock-Based Compensation, Sharon Hannes
Reverse Monitoring: On The Hidden Role Of Employee Stock-Based Compensation, Sharon Hannes
Michigan Law Review
This Article develops a new understanding of equity-based compensation schemes, such as employee stock option plans. Current literature views such schemes as a measure aimed at motivating the recipient employees to work harder for the firm. Under that view, this method of remuneration either complements or substitutes for other measures used to monitor the performance of the recipient employees. In contrast, this Article proposes that recipient employees be viewed as potential monitors of other employees and that stock options (or similar types of compensation) motivate them to fulfill this task. This view has many applications and can shed light on …
Deferred Compensation Arrangements Under Section 83 Of The Internal Revenue Code: Is Restricted Property Still A Viable Means Of Compensation?, Michigan Law Review
Deferred Compensation Arrangements Under Section 83 Of The Internal Revenue Code: Is Restricted Property Still A Viable Means Of Compensation?, Michigan Law Review
Michigan Law Review
When faced with the problem of compensating key executives, employers have tended to avoid the exclusive use of current cash compensation, since this would result in an immediate and substantial income tax to highly paid employees. Deferred compensation plans have been utilized in order to maximize tax benefits for employees, such as deferred recognition of income and capital gains treatment. Although such plans are structured to meet the needs of the particular employer and employee, several forms of deferred compensation are common. Among these are qualified and unqualified pension, profit-sharing, and stock bonus plans; qualified, restricted, and employee stock purchase …
Corporations--Capital And Stock-Right Of Employee To Receive Stock Dividend Under Stock Purchase Agreement, John E. Riecker S.Ed.
Corporations--Capital And Stock-Right Of Employee To Receive Stock Dividend Under Stock Purchase Agreement, John E. Riecker S.Ed.
Michigan Law Review
Defendant's decedent, X, was executive vice-president and treasurer of plaintiff corporation. Intending to increase X's compensation, plaintiff drew up a plan calling for the sale of 100 shares of plaintiff's stock to X, plaintiff to have a lien on the stock certificate made out in X's name and the right to credit all dividends declared on the stock against its purchase price until fully paid. X was granted the right to vote the stock and to receive the dividends declared after full payment. The agreement specifically provided that X was not entitled to possession of the …
Corporations - Stock Options - Requirements Of Consideration For Employee Options, George D. Miller, Jr. S.Ed.
Corporations - Stock Options - Requirements Of Consideration For Employee Options, George D. Miller, Jr. S.Ed.
Michigan Law Review
The Delaware court, in two recent decisions, has indicated what may be an increasingly strict attitude toward employee stock options, particularly when granted to executive officers or directors. It will be the purpose of this comment to examine the significance of these decisions, and to attempt to determine the extent of the change wrought by them.
Corporations-Validity Of By-Law Requiring Assent Of All Or Proportion Of Shareholders Greater Than Majority For Action, Alan C. Boyd
Corporations-Validity Of By-Law Requiring Assent Of All Or Proportion Of Shareholders Greater Than Majority For Action, Alan C. Boyd
Michigan Law Review
The defendants, employees of the plaintiff corporation, were discharged by the president, who was empowered under the by-laws to appoint, remove, employ and discharge, and fix the compensation of, all employees of the corporation, subject to the approval of the board of directors. A majority of the directors and the holders of a majority of the shares were in agreement that the defendants should be discharged. The defendants refused to leave the premises, took possession of certain of the corporate books and records, and otherwise interfered with the conduct of the business, claiming that their discharge was ineffective because it …
Corporations-Officers And Directors-Stock Option Incentive Employment Contracts For Corporation Executives, A. B. Perlin, Jr. S.Ed.
Corporations-Officers And Directors-Stock Option Incentive Employment Contracts For Corporation Executives, A. B. Perlin, Jr. S.Ed.
Michigan Law Review
In the past few decades considerable attention has been directed toward "piecework payment" for corporate executives; that is, compensation based largely upon results rather than upon past or expected performance. The stock option incentive employment contract' is one of the means utilized to achieve that desired objective.
Corporations - Legal Aspects Of Corporation Bonuses, H. Marshall Peter
Corporations - Legal Aspects Of Corporation Bonuses, H. Marshall Peter
Michigan Law Review
It would clearly be inaccurate to say that the percentage method of compensation represents a modern idea. Its rationale is so simple that there must have been instances of its utilization in early history. Be that as it may, it is a device which attained little prominence in this country before the beginning of the present century and which has grown since then with amazing rapidity. Along with the growth of bonus plans in some form or another, perplexing problems have arisen economic, social and perhaps even moral as well as legal. The emphasis of this comment will be upon …
Fees And Expenses In A Corporate Reorganization Under Section 77b, George F. Medill
Fees And Expenses In A Corporate Reorganization Under Section 77b, George F. Medill
Michigan Law Review
A District Court of the United States in a proceeding under Section 77B of the Bankruptcy Act has substantially all the powers of a court of equity. All that follows may be summarized by saying that allowances of compensation for services and reimbursement for expenses are to be made by the court according to the principles and practices of equity applied to the accomplishment of the purposes of the Section and the object of the proceeding-a fair and equitable plan of reorganization. The Section, so far as it provides for or regulates allowances, is no more than a statutory restatement …