An Assembly bill (A2885) introduced on June 5 would give greater flexibility to corporations in granting equity awards to employees. The sponsors of the bill maintain that corporate officers are often in a better position to evaluate whether employees should be granted equity awards than are corporate boards of directors or board committees. The bill would allow boards of directors to pass resolutions to allow officers to grant equity awards. The bill also would provide certain limits on officers’ powers in this regard, such as precluding officers from granting equity awards to themselves, and providing that the board will continue to determine the size of the pool from which equity grants can be made.
Note: This article was published in the July 2008 issue of the New Jersey eAuthority.