SAN DIEGO, April 19, 2022 (GLOBE NEWSWIRE) -- The Shareholders Foundation, Inc. announces that a lawsuit was filed by an investor of Cloudflare, Inc. (NYSE: NET) against the board of directors of Cloudflare, Inc. in an effort to block a June 2nd vote on Cloudflare’s incentive plan for a 10-year award of stocks to certain Cloudflare founders.
Investors, who purchased shares of Cloudflare, Inc. (NYSE: NET) long-term and continue to hold any of those NYSE: NET shares, might have certain options and should contact the Shareholders Foundation at mail@shareholdersfoundation.com or call +1(858) 779 - 1554.
The plaintiff alleges that the board is breaching its fiduciary duty by concealing material information ahead of the shareholder vote.
The plaintiff says that the directors are seeking approval from investors for proposed founder packages and separate compensation awards for non-founders. The plaintiff says that if approved those “patently unfair” “mega-grant” plans would grant founders Matthew Prince and Michelle Zatlyn stock worth up to $3.35 billion.
The plaintiff claims that Prince and Zatlyn risk diluting their positions if they convert those shares to regular, marketable Class A stock and “rather than sell off Class B shares and put their control at risk, Prince and Zatlyn decided to effectively blackmail their own boards of directors into giving them new stock grants worth billions of dollars of Class A stock.”
The plaintiff also accuses Prince and Zatlyn of working with the company's compensation consultant to advise a director compensation committee that Cloudflare's current equity compensation is inadequate, and that awards based on comparable-sized businesses alone would fall short of a “meaningful source of motivation.”
Those who hold Cloudflare, Inc. (NYSE: NET) shares should contact the Shareholders Foundation, Inc.
The Shareholders Foundation, Inc. is a professional portfolio legal monitoring and a settlement claim filing service, which does research related to shareholder issues and informs investors of securities class actions, settlements, judgments, and other legal related news to the stock/financial market. The Shareholders Foundation, Inc. is not a law firm. The information is provided as a public service. It is not intended as legal advice and should not be relied upon.
CONTACT:
Shareholders Foundation, Inc.
Michael Daniels
+1 (858) 779-1554
mail@shareholdersfoundation.com
3111 Camino Del Rio North
Suite 423
San Diego, CA 92108
