Director compensation has been in the spotlight since the June 2012 decision in Seinfeld v. Slager. In both Seinfeld and the more recent Calma v. Templeton, in reviewing equity grants to non-employee directors under a shareholder-approved plan without a director-specific award limit for breach of director fiduciary duty, the court applied the entire fairness standard of review rather than the more deferential business judgment rule. Last week, Facebook agreed to settle a shareholder derivative suit against Facebook's board of directors alleging breach of fiduciary duty, waste, and unjust enrichment in connection with the board's approval in 2013 of annual cash and equity compensation for non-employee directors. As part of the settlement, Facebook agreed to implement and maintain certain corporate governance reforms for five years.

Practical Law asked Bindu Culas of Frederic W. Cook & Co., Inc. to discuss trends in director compensation and the implications of the recent Delaware Chancery Court cases. To learn more, see Expert Q&A on Director Compensation.