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Sheri Adler

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Sheri advises boards, compensation committees, and companies on executive compensation matters. She designs and documents equity incentives, cash bonus arrangements, employee stock purchase plans, and deferred compensation plans. Sheri also negotiates individual contractual arrangements with C-suite executives, including employment, retention, change in control, severance, and separation agreements.

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Background

Under Section 922 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, Congress expanded protections for whistleblowers reporting possible violations of federal securities laws to the Securities and Exchange Commission (SEC).[1] Specifically, the statute established certain financial incentives and confidentiality guarantees for whistleblowers reporting potential violations of securities laws. In 2011, the SEC implemented rules (as subsequently amended) regarding the Dodd-Frank whistleblower program. Under SEC Rule 21F-17(a), no person may take an action to impede an individual from communicating directly with the SEC about possible securities law violations, including by enforcing or threatening to enforce confidentiality agreements with respect to such communications (subject to certain limited exceptions).

A board of directors of a Delaware company may delegate its authority to grant equity awards if certain requirements enumerated in the Delaware General Corporation Law (DGCL) are met. Effective August 1, 2023, updates were made to these DGCL requirements.

Under §§ 157(c) and 152(b) of the DGCL, a board must establish the delegation through…

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As discussed here and here, on October 26, 2022, the Securities and Exchange Commission (SEC) adopted final rules to implement Section 10D of the Securities Exchange Act. The final rules direct the New York Stock Exchange (NYSE) and Nasdaq to adopt listing standards requiring each listed issuer to implement a clawback policy. The clawback policy must mandate the recovery of incentive compensation that was awarded erroneously to executive officers, based on misstated financials.