kaal:claim:5583610-013

If LER rewards are set so generously that they effectively purchase shareholder votes, the program becomes disproportionate or coercive and courts will invalidate it.

Source quote, verbatim

If LERs are disproportionately or coercively implemented, such as for example overly generous voucher rewards that effectively buy stockholder votes, then LER would violate the applicable requirements and risk invalidation by courts.

From

Wulf A. Kaal, Liquid Equity Rewards in Corporate America (2025), 4.3. Legal Boundaries Under Delaware and SEC Rules, p. 19
https://ssrn.com/abstract=5583610 · source PDF

Cite as

Wulf A. Kaal, Liquid Equity Rewards in Corporate America (2025). SSRN: https://ssrn.com/abstract=5583610

Holds when

reward size large enough to buy votes
Delaware enhanced scrutiny

Classification

failuresupport: arguedfailure: coercive over-rewardingfamily: investor-protection-gapinstitutional-design

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