Gordon v. Goodyear
United States District Court for the Northern District of Illinois
2012 WL 2885695 (2012)
Navigant's board approved executive compensation increases for 2010 despite a significant stock-price decline and a nonbinding shareholder vote rejecting the recommended pay; Goodyear (defendant), the only board member who was also a Navigant executive, personally benefited from the approved compensation. Gordon (plaintiff), a shareholder, sued derivatively alleging excessive compensation without first making a demand on the board, arguing demand would have been futile; Goodyear moved to dismiss for failure to make that demand.
Whether demand on a board of directors is futile where the plaintiff-shareholder fails to establish reasonable doubt that the directors were disinterested and independent and that the challenged transaction reflected valid business judgment.