As recently reported in a Wall Street Journal article, plaintiffs’ lawyers hatched a new generation of executive compensation lawsuits in 2012, which are expected to be rolled out again in 2013.  These lawsuits are distinct from the first generation of “say-on-pay” lawsuits in 2011, which generally were filed against companies following shareholder meetings based on failed shareholder votes on “say-on-pay” proposals. Instead, borrowing techniques developed in M&A litigation, the lawsuits are styled as class actions that seek to enjoin a company from holding its annual shareholders meeting on the basis that disclosures relating to executive compensation matters being submitted for shareholder approval are inadequate.

In a recent memorandum, Covington’s Securities and Securities Litigation groups describe the implications of these lawsuits.