Say-on-Pay and the Business Judgment Rule: Lessons from Cincinnati Bell and Beazer Homes

October 24, 2011

Two recent shareholder derivative lawsuits filed following negative say-on-pay advisory votes (against Cincinnati Bell and Beazer Homes) present a contrast in their application of the “business judgment rule” and the requirement of pre-suit demand in the context of executive compensation. The attached alert memorandum analyzes these conflicting authorities and discusses important steps that can be taken to mitigate risks arising from the resulting legal uncertainty.