In Re Investors Bancorp, Inc. Stockholder Litigation

Summary

The court held that stockholder approval of general parameters in a discretionary equity incentive plan does not ratify later self-interested awards that the directors independently determine. Because the complaint reasonably alleged that the awards were excessive and unfair, the ratification defense could not support dismissal, and the directors were required to establish entire fairness. The court also held that demand was excused because the non-employee directors participated in the same challenged compensation decisions.