When it comes to compensation, it’s easy to get caught up in strategy and communication. We know that missing a chance at impacting the big picture is missing a chance at being successful. But, pay is also about the smallest of details. These include the language in plan documents, the timing of processing or reporting transactions and making sure that people know their roles and sign correctly on the correct lines. In June of 2014, a shareholder filed a lawsuit against Facebook. The suit alleged that the Board was overpaid and that proper procedures were not followed when determining their pay. These kinds of lawsuits against executives and boards happen fairly frequently and go away just about as frequently. In October of 2015, Facebook found out that this was one of the lawsuits that would not just go away.

Facebook has an ownership structure that is a unique, but not completely unusual. Their CEO, Mark Zuckerberg, also hold a majority of the voting power in the company. This means that he is the highest-ranking executive at the company, the Chairman of the Board of Directors and the single person who decides what “shareholders” approve or disapprove. This unique combination of roles has thus far served Facebook’s investors and employees pretty well and not a lot of people are complaining.

The lawsuit filed in 2014 had several complaints. Basically, Facebook’s argument to toss out the suit was that the majority of shareholders had approved a raise made to the board in 2013. As in so many big things, a little tiny thing may be what causes the real problem. In this case, the problem may be based simply on whom Mr. Zuckerberg was speaking for when the approval was made.

Delaware law allows a company to approve things like a raise to the Board via the unanimous consent of a majority of the shareholders. While Mr. Zuckerberg IS the majority of the shareholders, the judge in the case is questioning whether he made it clear he was acting as the majority of shareholders (rather than as the Chairman of the Board) when agreeing to the raise. Essentially, did he make it clear that he was approving things as the majority shareholder or was he still acting as the Chairman of the Board? And, did he sign the on correct line, using the correct one of his three distinct corporate personalities?

Oddly, the shareholder bringing the suit is doing it in the name of saving the company (and therefore its shareholders’ money). The reality is this suit is likely to cost the company more in time and legal fees than the raises ever did. And, while it appears that there was nothing nefarious going on in the board meeting, Facebook’s inability to show proper documentation and the following of procedures has resulted in the suit remaining to live.

As compensation professionals, we need to be just as aware of these types of rules as the lawyers, executive and board members we are supporting. It’s terrible when we get all of the big, hard and complex stuff right then find ourselves hamstrung by a missing word, signature or declaration of personality. Feel free to share your own story of a missed detail that resulted in headaches, penalties or worse.

P.S. Regular readers of this blog will notice the irony of this post using Facebook as an example when another recent post made it clear that you are NOT Facebook.  What can I say?  I guess sometimes we are all Facebook.

Dan Walter is the President and CEO of Performensation. He is passionately committed to aligning pay with company strategy and culture. Grab a copy of Dan’s new comprehensive issue brief, Performance-Based Equity Compensation. Dan also cowrote “Everything You Do in COMPENSATION IS COMMUNICATION”, with Comp Café writers, Ann Bares and Margaret O’Hanlon. And believe it or not, he has co-authored “The Decision Makers Guide to Equity Compensation”and “Equity Alternatives.” Connect with Dan on LinkedIn. Or, follow him on Twitter at @Performensation and @SayOnPay.

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