Suppose that a corporation has three directors, A, B & C, each of whom is compensated by the corporation. Is director A financially interested in a resolution fixing the compensation of director B? Corporations Section 310(a) provides the following answer:
A director is not interested within the meaning of this subdivision in a resolution fixing the compensation of another director as a director, officer or employee of the corporation, notwithstanding the fact that the first director is also receiving compensation from the corporation.
Thus, the statute encourages the meaningless formality of "round robin" voting on director compensation so that each director votes on the other directors' compensation while abstaining from the vote on her own compensation.
In some cases, round robin voting may not be possible. For example, a corporation may have three authorized directors and one vacancy. Because board action requires the vote of two directors, a resolution fixing compensation would require the vote of the director receiving the compensation. In that case, the director's compensation would not be void or voidable if it is approved by the shareholders pursuant to Section 310(a)(1) or the director sustains the burden of proof under Section 310(a)(3).
There's nothing ornithological about a "round robin"
The term of "round robin" reportedly has nothing to do with the bird. According to some sources, it refers to a manner of signing documents in the round so that no name appears first. Thus, J.M. Barrie wrote:
Some of them wanted it to be an honest ship and others were in favour of keeping it a pirate; but the captain treated them as dogs, and they dared not express their wishes to him even in a round robin.
Peter and Wendy 193 (Charles Scribner's Sons 1911).