The Corporate Counsel.net. Blog has the latest here on yesterday’s decision issued by New York State Justice Ramos in Spitzer v. Grasso. (Access the opinion here.) This opinion is a must-read for every benefits lawyer who drafts or advises clients on nonqualified deferred compensation plans. There are pages and pages of discussion regarding the NYSE SESP’s and SERP’s terms.
Also, excerpt from this Wall Street Journal article here:
Jim Barrall, head of the global executive-compensation and benefits practice at Latham & Watkins LLP in Los Angeles, described the findings as “stunning.” “I have never heard of a court decision finding a breach of fiduciary duty based on the failure to disclose all the numbers” about the size of a supplemental pension.
At a minimum, Mr. Barrall suggested, corporate CEOs will have to make sure “the board understands the numbers and all the elements of the [leader’s] pay package and how they work together.” At many companies, the size of an executive’s supplemental pension swells along with the magnitude of bonuses and equity awards.
Legal experts expressed surprise that the justice would make such a ruling before the case went to trial. “It’s really extraordinary,” said Christopher Clark, a former assistant U.S. attorney who is now an attorney at LeBoeuf, Lamb, Greene & MacRae LLP. “I’m not used to seeing cases with this many facts and this many depositions decided without a trial.”
- AG’s press release
- Findlaw’s compilation of links, including a link to the actual employment agreement discussed in the case (an argument was made that the employment agreement constituted an amendment to the SESP, amending the SESP to allow for an in-service distribution. The argument was rejected.)