OPINION
Delaware Chancery Court Move in Right Direction As Trade Desk CEO Pay Package Lawsuit Dismissed
Dear Friends,
In news that shows that things are starting to move in the right direction, folks, Delaware’s Chancery Court dismissed a shareholder lawsuit that challenged The Trade Desk CEO Jeff Green’s $5.2 billion pay package.
In the verdict, the shareholder lawsuit against the CEO pay package was dismissed. The ruling was issued by Vice Chancellor Paul A. Fioravanti, Jr. This is a step in the right direction for what is justice and correct in Delaware’s equity court.
It took years of legal fees and fighting, for a pay package approved in 2021, but alas we have justice. We can only hope for more of this as newly-elected Delaware Governor Matt Meyer appears to understand the situation and what needs to be addressed. He is poised to address Chancery Court problems, which I will write more about.
See the Delaware Town Square story below for more information. Please send your feedback on this, folks, it is always welcome and appreciated.
Respectfully Yours,
JUDSON BENNETT–Coastal Network
Delaware Court Dismisses Lawsuit Over Trade Desk CEO’s $5 Billion
By Claudia Estrada
WILMINGTON – In a significant legal victory for The Trade Desk, Delaware’s Chancery Court has dismissed shareholder claims challenging CEO Jeff Green’s multibillion-dollar compensation package.
The Trade Desk is a technology company that deals with digital advertising, with a net worth of $3.9 billion.
The ruling, issued by Vice Chancellor Paul A. Fioravanti, Jr., highlights procedural insufficiencies in the plaintiffs’ case, reaffirming the company’s handling of executive pay.
The lawsuit, led by investor Leroy Huizenga, alleged that Green’s compensation package—potentially worth up to $5.2 billion—was approved without a proper stockholder vote. The plaintiff argued that the company’s board allowed Green to dictate his own pay.
However, the court ruled that shareholders failed to meet a key legal requirement. Making a pre-suit demand that the company’s board take action. Without this step, the lawsuit lacked standing, leading to its dismissal.
At the center of the case was an equity-based compensation plan approved in October 2021. Initially valued at $819 million, but could grow into $5.2 billion. Shareholders contended that five of the seven voting directors were too conflicted to approve the deal.
Despite these concerns, Fioravanti determined the claims were insufficient, specifically when compared to the recent Delaware court ruling that invalidated Tesla CEO Elon Musk’s $56 billion pay package. Unlike that case, the court found no compelling evidence of bad faith or clear breaches of fiduciary duty by The Trade Desk’s board.
The board had eight directors at the time of the lawsuit, meaning plaintiffs had to show that at least four of them were unable to fairly evaluate a lawsuit against Green. The court reviewed each director’s independence and found that plaintiffs failed to prove that a majority of the board was conflicted.
The court granted the defendants’ motion to dismiss the case in full.
Due to this case being subject to appeal, the Delaware Court of Chancery could not comment.