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Espinoza v. Zuckerberg
Delaware Court of Chancery
124 A.3d 47 (2015)
Ernesto Espinoza (plaintiff) brought a shareholder derivative suit challenging the Facebook, Inc., board of directors’ (defendants) decision to approve certain compensation to outside directors. Mark Zuckerberg (defendant) was the controlling stockholder of Facebook, controlling over 61 percent. After Espinoza filed suit, Zuckerberg, in a deposition and affidavit, approved the contested compensation. Zuckerberg had not received the compensation. The directors moved for summary judgment on the ground that Zuckerberg’s approval constituted stockholder ratification of the board’s compensation decision.
Rule of Law
Holding and Reasoning (Bouchard, J.)
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