Del. Court Dismisses Lawsuit Over Trade Desk CEO's $5B

Court of Chancery/Delaware Courts Judicial Branch (Photo from courts.delaware.gov)

WILMINGTON – In a significant legal victory for The Trade Desk, Delaware’s Chancery Court has dismissed shareholder claims challenging CEO Jeff Green’s multibillion-dollar compensation package.

The Trade Desk is a technology company that deals with digital advertising, with a net worth of $3.9 billion.

The ruling, issued by Vice Chancellor Paul A. Fioravanti, Jr., highlights procedural insufficiencies in the plaintiffs’ case, reaffirming the company’s handling of executive pay.

The lawsuit, led by investor Leroy Huizenga, alleged that Green’s compensation package—potentially worth up to $5.2 billion—was approved without a proper stockholder vote. The plaintiff argued that the company’s board allowed Green to dictate his own pay.

However, the court ruled that shareholders failed to meet a key legal requirement. Making a pre-suit demand that the company’s board take action. Without this step, the lawsuit lacked standing, leading to its dismissal.

At the center of the case was an equity-based compensation plan approved in October 2021. Initially valued at $819 million, but could grow into $5.2 billion. Shareholders contended that five of the seven voting directors were too conflicted to approve the deal.

Despite these concerns, Fioravanti determined the claims were insufficient, specifically when compared to the recent Delaware court ruling that invalidated Tesla CEO Elon Musk’s $56 billion pay package. Unlike that case, the court found no compelling evidence of bad faith or clear breaches of fiduciary duty by The Trade Desk’s board.

The board had eight directors at the time of the lawsuit, meaning plaintiffs had to show that at least four of them were unable to fairly evaluate a lawsuit against Green. The court reviewed each director’s independence and found that plaintiffs failed to prove that a majority of the board was conflicted.

The court granted the defendants’ motion to dismiss the case in full.

Due to this case being subject to appeal, the Delaware Court of Chancery could not comment.

TO READ THE FULL COURT CASE CLICK HERE