SWANSON v. WEIL
United States District Court, D. Colorado.
September 26, 2012.
II. FACTUAL BACKGROUND
Plaintiff alleges that he "is and been a shareholder of Janus since at least January 2003, and has held his Janus stock from January 2003 to the present." (Am. Verified Compl. ["Compl."] ¶ 19.) Janus is a Delaware corporation headquartered in Denver. (Id. ¶ 20.) Janus is a "publicly owned asset management holding company with approximately $167.7 billion in assets under management." (Id. ¶ 43.)
The Janus Board consists of twelve directors. (Compl. ¶¶ 21-33; Decl. of Angie Young Kim in Supp. of Defs.' Mot. to Dismiss ["Kim Decl."], Ex. A at 6-9.)1 All are independent directors (i.e., not employed by Janus) except Richard M. Weil ["Weil"], Janus' CEO. (Id.) In 2010, the Compensation Committee consisted of six independent directors (Ex. A to Kim Decl. at 12; Compl. ¶¶ 23-25, 29, 31.) In addition to Weil, the other executive defendants include: Jonathon D. Coleman ["Coleman"], Gregory A. Frost ["Frost"], James P. Goff ["Goff"], and R. Gibson Smith ["Smith"]. (Compl. ¶¶ 34-38.)
On March 16, 2011, Janus filed its Proxy with the SEC. (Compl. ¶ 6; Ex. A to Kim Decl.) The Proxy provides 46 pages of information on Janus' 2010 executive compensation. (Ex. A to Kim Decl. at 28-73.) It states that the Compensation Committee met six times during fiscal year 2010, and considered market data from the broader investment management industry and Janus' peer group to determine executive compensation in 2010. (Id. at 13, 31, 33-34.) It also notes that the Committee conferred with senior management, the human resources department, independent directors from the Board, and an outside compensation consultant. (Id. at 31-32, 39.) According to the Proxy, Janus' compensation for its executives reflects Janus' five key policies: (1) alignment of executive interests with those of public and fund shareholders, (2) competitive pay, (3) rewarding performance against financial and strategic objectives, (4) meritocracy, and (5) risk management. (Id. at 33.) It also states that "[c]ompensation of all Janus executives depends on a combination of Company and individual performance". (Id.; see also Compl. ¶ 50.)
Janus asserts that the total amount paid to four of five of Janus' highest paid executives (Frost, Coleman, Smith and Goff) decreased from 2009 to 2010. (Ex. A to Kim Decl. at 49.) As for Weil, half of his 2010 compensation consisted of a $10 million restricted stock award vesting over three years as an incentive to leave his prior employment. (Id. at 9, 47, 51; Compl. ¶ 3.) In evaluating Weil's individual performance, the Committee noted:
Mr. Weil's leadership and experience assisted the Company in navigating very difficult industry conditions and an unbalanced economic recovery. Under his direction, Janus delivered strong financial results for the year including profit growth, enhanced margins, a strengthened balance sheet and positive net flows in fixed income and Perkins businesses.
(Ex. A to Kim Decl. at 39.)