Item 1.01. Entry into a Material Definitive Agreement

      The Board of Directors (the “Board”) of Sotheby’s has approved certain changes in compensation for non-employee members of the Board, other than the Chairman of the Board, effective November 1, 2007. The annual stock compensation was increased from $35,000 to $45,000, the fee per meeting of the Board or Board Committee was increased from $1,000 to $1,500, the annual fee for the Chairman of the Compensation Committee was increased from $5,000 to $7,500 and the annual fee for the Chairman of the Audit Committee was increased from $10,000 to $12,500. The annual cash compensation for non-employee Directors, other than the Chairman of the Board, remains unchanged at $25,000.

      On November 6, 2007, the Board of Directors of Sotheby’s approved the First Amendment to the Sotheby’s Stock Compensation Plan for Non-Employee Directors in order, among other things, to reflect the increase in the annual stock compensation for non-employee Directors, other than the Chairman of the Board, from $35,000 to $45,000 and to implement a ten year term for the plan beginning May 6, 2007. The Company will file a copy of this amendment as an exhibit to its Annual Report on Form 10-K for the year ending December 31, 2007.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.