Delaware court splits Foley pay fight at Fidelity National Financial

A Delaware judge split a fight over Fidelity National Financial's pay, giving the industry its first read on a rewritten governance law.

On June 15, 2026, Vice Chancellor Will of the Delaware Court of Chancery delivered a ruling that anyone serving on a board or a compensation committee should keep handy.

The story starts with a shareholder. Patrick Ayers, who owns stock in Fidelity National Financial, sued the company's directors over two pay decisions. One was a $50 million stock grant to founder and non-executive chairman William P. Foley, meant to keep him in his seat through 2027. The other was the pay the directors set for themselves from 2022 through 2024.

Will tossed the first claim and kept the second. That split is the whole lesson.

Foley's grant held up because the directors who approved it weren't the ones cashing it. The court treated the grant as its own transaction. A special committee handled it, leaned on an outside compensation consultant, asked for legal advice, and talked Foley down from his original $60 million request to $50 million. To sue on the company's behalf, Ayers first had to show that most of the board couldn't fairly weigh whether to bring the case. He fell short.

Part of the reason is a fresh change to Delaware law. Lawmakers recently rewrote 8 Del. C. § 144, the statute that governs deals where directors have a conflict. The new version gives directors at exchange-listed companies a stronger presumption of independence. Knocking it down now takes "substantial and particularized facts" of a real conflict. This is the first time a Delaware court has unpacked that language, and the court read "substantial" to mean the facts have to be genuinely material - not just numerous.

Ayers tried. He argued three directors were too tied to Foley through shared board seats at his other companies and co-investments in sports franchises, including the Vegas Golden Knights. The court was not persuaded. Sitting on the same boards and holding a minority stake in a hockey team don't, on their own, show a director can't judge independently.

The directors' own pay was where the plaintiff gained ground. When directors set their compensation, they sit on both sides of the table, so the protective business judgment rule falls away and a stricter fairness test applies. Ayers alleged that director pay climbed well above the peer median - by his count, more than 21% above in 2022, 38% in 2023, and 67% in 2024 - while FNF trailed peers on market cap, revenue, and net income. The court called that enough to proceed against the Compensation Committee members who approved the awards. Directors who only received the pay, without voting on it, were dropped from that claim. But the unjust enrichment claim lives on against everyone who kept the money.

The bottom line for the industry: the rewritten Section 144 shields independent directors on conflicted deals they don't profit from. It does nothing for directors who pay themselves. That line is now drawn in case law, and worth remembering the next time a compensation committee meets.