Federal Court Dismisses Novel Voting Rights Claim
Under the IRS Code, executive compensation over $1,000,000 a year is not deductible absent a stockholder vote to approve a compensation plan that meets certain objective criteria. Here the Court dealt with a complaint that alleged that the approval vote had to include the vote of stock that under the corporation's certificate of incorporation did not normally have the right to vote. The Court rejected that argument and held that only voting stock had the right to approve a compensation plan. Hence, the DGCL was saved from the IRS.