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Covanta Board Accused of Self-Dealing, Skirting Bylaws (1)

Sept. 13, 2019, 3:30 PMUpdated: Sept. 13, 2019, 7:18 PM

Covanta Holding Corp.’s directors were hit with a lawsuit accusing them of violating Delaware corporate law and breaching the company’s bylaws by making self-dealing payments to themselves.

The waste management company’s board instituted a “non-employee director compensation program” that includes annual cash retainers, yearly equity awards, and additional payments for directors who chair committees, according to the Chancery Court complaint filed by an investor.

Those payments breach bylaws that expressly prohibit board members from getting more than a fixed fee per meeting and expense reimbursements, the proposed class action claims. They also violate a Delaware General Corporation Law provision subordinating ...