SEC Approves NASDAQ Rule Requiring Disclosure of “Golden Leash” Arrangements
Do your directors have a “golden leash”? If so, NASDAQ-listed companies will be required to publicly disclose those arrangements as a result of newly adopted rules. “Golden leash” arrangements are compensation arrangements between activist shareholders and their director nominee in connection with his or her service on, or candidacy for, a company’s board of directors, usually in connection with a proxy fight. In a typical arrangement, a director or nominee would be entitled to receive certain compensation directly from the relevant activist shareholder if the company’s stock price performs in a certain manner over a specific time period. The new rules are described in the summary here: https://www.dorsey.com/newsresources/publications/client-alerts/2016/07/disclosure-of-golden-leash-arrangements
