kaal:claim:5583610-014

Issuing LER selectively to management-aligned shareholders while excluding others breaches the duty of loyalty by creating an uneven playing field, so rewards must be allocated uniformly on objective criteria such as ownership tenure.

Source quote, verbatim

Therefore, LER voucher rewards cannot be issued selectively to shareholders who are aligned with management while excluding others. LER allocations to prioritize incumbent interests would constitute a breach by creating an uneven playing field.

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

proxy fights
duty of loyalty analysis under Delaware law

Classification

failuresupport: arguedfailure: selective issuance disloyaltyfamily: agency-cost-and-managerial-opportunismcorporate-governance

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