(June 15, 2012, Weil News)
Weil, Gotshal & Manges LLP obtained a major victory for Ralph Lauren Corp. on June 13, 2012, when Justice Lawrence Marks of the New York Supreme Court dismissed a shareholder derivative action challenging the compensation paid to Ralph Lauren and other executives. The suit was brought by the City Pension Fund for Firefighters and Police Officers in the City of Pembroke Pines.
Ruling from the bench following a one and a half hour argument, Justice Marks stated that executive compensation decisions should be made by boards of directors elected by all shareholders, not single shareholders or judges. Justice Marks accordingly held that plaintiff lacked standing to act for Ralph Lauren Corp. because it had failed to make a pre-suit demand on Ralph Lauren Corp.’s board of directors that would have allowed the board to make a business judgment concerning the wisdom of the suit. Justice Marks rejected the plaintiff’s argument that it was not required to do so because Ralph Lauren controls Ralph Lauren Corp. and elects a majority of the corporation’s directors.
The Weil team was led by partner Stephen Radin, who argued the motion, with valuable support from associate Evert Christensen.