Cloudflare, Inc. (NYSE: NET) Investor Lawsuit Filed In Effort To Block June 2nd Vote On Proposed Incentive Plan

An investor in Cloudflare, Inc. (NYSE: NET) shares filed a lawsuit against the board of directors of Cloudflare, Inc. in effort ot 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) and currently hold NYSE: NET long-term, have certain options and should contact the Shareholders Foundation at mail@shareholdersfoundation.com or call +1(858) 779 - 1554.

The plaintiff alleges that the founders decided "to effectively blackmail their own boards of directors" into handing out huge grants of stock and that the board of directors is breaching its fiduciary duty by concealing material information ahead of the shareholder vote.

The plaintiff says that the directors of CloudFlare, Inc 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 of up to $3.35 billion, each.

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." The plaintiffs says that "perhaps there will come a point when a board or compensation committee actually stands up to one of these founders".

Those who purchased shares of Cloudflare, Inc. (NYSE: NET) have certain options and should contact the Shareholders Foundation.

Contact:
Michael Daniels
Shareholders Foundation, Inc.
3111 Camino Del Rio North
Suite 423
San Diego, CA 92108
Tel: +1-(858)-779-1554
E-Mail: mail@shareholdersfoundation.com

About Shareholders Foundation, Inc.
The Shareholders Foundation, Inc. is a professional portfolio monitoring and settlement claim filing service, and an investor advocacy group, which does research related to shareholder issues and informs investors of securities lawsuits, settlements, judgments, and other legal related news to the stock/financial market. Shareholders Foundation, Inc. is in contact with a large number of shareholders and offers help, support, and assistance for every shareholder. The Shareholders Foundation, Inc. is not a law firm. Referenced cases, investigations, and/or settlements are not filed/initiated/reached and/or are not related to Shareholders Foundation. The information is provided as a public service. It is not intended as legal advice and should not be relied upon.

This release was published on openPR.