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ARTICLE · 23 MAY 2014

More On "Golden Leash" Arrangements

McCarthy Tétrault
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The debate about so-called "golden leash" arrangements has picked up again.

CanadaCorporate/Commercial Law
Deandra L. Schubert
Deandra L. Schubert
Shane D'Souza
Shane D'Souza
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The debate about so-called "golden leash" arrangements has picked up again. The Council of Institutional Investors ("CII"), an influential association of institutional investors, recently wrote a letter to the U.S. Securities and Exchange Commission ("SEC") expressing its concerns regarding the transparency of compensation paid in "golden leash" arrangements.

As discussed in our previous post, "golden leash" arrangements arise when a shareholder activist privately offers to compensate its nominee directors in connection with such nominees' service as a director of a target corporation. In January, 2014, Institutional Shareholder Services Inc. provided its views on by-laws designed to prohibit "golden leash" arrangements but did not specifically express any concerns about the appropriateness of such compensation for nominee directors provided the arrangements are disclosed (see our post).

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