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A suit filed by a Microsoft shareholder in King County Superior Court seeks to prevent the company from holding upcoming votes on executive pay and employee stock until Microsoft gives shareholders more information — alleging that its recently filed proxy statement is “materially misleading and incomplete.”

However, this is not a unique situation. The suit was filed by a firm, Faruqi & Faruqi, that has lodged a string of similar complaints against public companies. The shareholder in the Microsoft case, Natalie Gordon, has been named as a plaintiff in a series of proposed class-action suits.

Corporate lawyers say it’s part of a new trend in securities litigation in which plaintiff’s firms seek to get companies to reach settlements — sometimes including significant attorney’s fees — to avoid postponing their annual shareholder meetings.

“The rationale for the nascent claims in these lawsuits is troubling,” say lawyers for DLA Piper in a recent article on the topic. “Such suits suggest a bottomless demand. Regardless of the amount and detail of information a company may disclose in its proxy statement, a plaintiff may assert that even more disclosure is required.  Indeed – paradoxically – a company that chooses to disclose more rather than less may be penalized for its candor, because every piece of information it discloses may provoke a plaintiff to argue that yet more backup information is required.”

Asked by GeekWire for comment, Microsoft said in a statement, “We will take every step to prevent these meritless claims from impacting business at the annual shareholders meeting. We take great care in drafting our disclosures and are confident they are accurate and complete.”

The suit alleges that the Microsoft proxy doesn’t give “a fair summary” of a consultant’s analysis of Microsoft executive compensation; doesn’t adequately describe compensation at comparable companies; doesn’t properly explain how the board determines executive pay; doesn’t provide an expert analysis of its employee stock purchase plan; and doesn’t explain the impact of additional employee shares on existing shareholders, among other alleged shortcomings.

The complaint seeks class-action status and “appropriate damages,” and asks the court to prevent the shareholder vote from taking place until the company provides “adequate disclosure.”

Here’s a copy of the complaint: PDF, 18 pages; and a link to Microsoft’s proxy statement. The company’s shareholder meeting is set for Nov. 28.

(Thanks to Venkat Balasubramani for his help spotting and digging up the court file.)

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