Amalgamated Bank v. Yahoo! Inc.
Delaware Court of Chancery
132 A.3d 752 (2016)
- Written by Sean Carroll, JD
Facts
Marissa Mayer, CEO of Yahoo! Inc. (Yahoo) (defendant), hired Henrique de Castro as Yahoo’s COO. Mayer consulted Yahoo’s board of directors (board) and Compensation and Leadership Development Committee (committee). The committee approved an offer to de Castro, albeit without significant discussion about the relationships between the various equity awards de Castro would receive. When de Castro sought changes to the offer, Mayer mischaracterized to the committee the original offer, and the committee agreed to the requested changes. The committee did not directly discuss the financial magnitude of the requested changes. After the committee’s approval, Mayer made additional changes to the offer, significantly increasing de Castro’s compensation, without obtaining board approval. The offer stated that if de Castro was terminated without cause, he would keep all of the equity compensation he had received. If Castro was terminated with cause, he would forfeit his equity compensation. de Castro’s performance was subpar, and he was fired without cause 14 months after he started. The board did not consider firing de Castro for cause. de Castro’s severance payout was worth approximately $60 million. Amalgamated Bank (Amalgamated) (plaintiff), a Yahoo stockholder, served Yahoo with a demand to produce its books and records in connection with the compensation of its officers and directors. Yahoo produced documents reviewed by the board and the committee, but declined to produce anything else. Amalgamated filed suit based on Delaware General Corporation Law § 220, seeking court-ordered production of the requested documents. Amalgamated’s stated purpose was to investigate de Castro’s hiring and firing.
Rule of Law
Issue
Holding and Reasoning (Laster, J.)
What to do next…
Here's why 810,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 46,300 briefs, keyed to 988 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.
