# kaal:claim:5583610-014

**Claim.** 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.

**Type.** failure  **Support.** argued

**Holds when.**

- proxy fights
- duty of loyalty analysis under Delaware law

**Source quote.**

> 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, page 19

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

**Verify.** sha256 of source PDF `2d73609d95ddb1573acc2a9e7af617fbe6283d6e591deb6317f6d5d804517c62` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202025%20-%20Liquid%20Equity%20Rewards%20in%20Corporate%20America.pdf

**Failure mode.** selective issuance disloyalty  (family: agency-cost-and-managerial-opportunism)

**Topics.** corporate-governance

**Keywords.** duty-of-loyalty, selective-issuance, uniform-distribution, entrenchment

**Canonical form.** This markdown file is the canonical hashed representation of the claim. Its sha256 is the content hash used for attestation.