Image by Mark Moz

Over the past two years, a growing number of U.S. banks has capped their directors’ earnings, but the ceilings are so high that they primarily serve to fend off potential shareholder litigation rather than control the pace of pay increases, reports Olivia Oran in a Reuters article.

The banks’ caps can be triple what directors now get paid, according to data and filings reviewed by Reuters.

“For the most part, these limits aren’t really going to affect director pay, other than the fact that it’s really just a protection for them,” said Bill Gerek who advises companies on executive pay and governance matters at Korn Ferry. “What’s the cost?”

Oran reports that consultants and lawyers say having any ceiling makes a company less likely to be targeted in a lawsuit from shareholders.

Read the article.

A Delaware judge has dismissed a lawsuit by Wal-Mart Stores Inc. shareholders who accused the board of the world’s largest retailer of trying to cover up bribes paid by company executives in Mexico, according to a report by Reuters.

The Delaware judge ruled that an earlier dismissal by an Arkansas judge of a nearly identical lawsuit by another group of shareholders precluded the Delaware case from going forward.

“He said that while the Arkansas plaintiffs may have chosen to rush their case rather than fully investigate alleged wrongdoing, their haste did not disqualify them from representing Wal-Mart shareholders,” Reuters reported.

In 2012, The New York Times reported that found Wal-Mart had engaged in a multi-year bribery campaign to build its Wal-Mart de Mexico business.

Read the article.

Photo by Brian Solis

Facebook announced that it plans to issue a third class of shares, Class C, that will not include voting power for its shareholders.

The purpose is to allow co-founder, chairman and CEO Mark Zuckerberg and his wife, Priscilla Chan, to pursue their dream of giving 99 percent of their shares to charity, without losing any of his voting control, according to a report in The Los Angeles Times.

“Shareholders will have to vote on the arrangement, but because non-Zuckerberg voting power already is a joke, we can assume it will pass,” The Times says.

Read the article.

Corporate Governance at UPS is not as clean as the board would like you to think, according to an article published on SeekingAlpha.com.

“UPS portrays itself as having a fair, transparent, and shareholder friendly corporate governance practices. Not all shareholders would agree, though,” the article says. “Two of its shareholders went on a campaign to publicly irritate and antagonize the board of directors, demanding the company to change a few of its disputable practices. This article tells their story.”

Read the story.

Shearman & Sterling has published its 2015 Corporate Governance & Executive Compensation Survey of the 100 largest U.S. public companies.

This year’s Survey, 13th in the series, examines some of the most important governance and executive compensation practices facing boards today and identifies best practices and merging trends. Senior partner Creighton Condon writes that the analysis provides insights into how companies approach governance issues and will allow readers to benchmark their companies’ corporate governance practices against best practices.

An introduction to the survey is published on the website of the Harvard Law School Forum on Corporate Governance and Financial Regulation. And Shearman & Sterling has published the complete report on its website.