Corporate governance - Vigil

Boards of directors and their compensation committees will soon shift attention to the 2017 compensation season. Key considerations in the year ahead include the following:

Russell Reynolds Associates recently interviewed numerous institutional and activist investors, pension fund managers, public company directors and other governance professionals about the trends and challenges that public company boards will face in 2017. Our conversations yielded a wide array of perspectives about the forces that are driving change in the corporate governance landscape.

Activist shareholders play an important role in modern corporate governance. The Economist describes them as “capitalism’s unlikely heroes” and reports that, between 2010 and 2014, half the companies in the S&P 500 index had an activist shareholder and one in seven were the target of an activist campaign (The Economist, February 7th 2015).

Our analysis shows that as a general matter, the MP rule tends to depress both acquisition prices and target shareholders’ expected welfare relative to both an optimal appraisal rule and several other plausible alternatives. In fact, we demonstrate that the MP rule is strategically equivalent to nullifying the appraisal right altogether.

The recent experiences of Solocal provide us with a good opportunity to consider the effects of shareholder activism at French listed companies.

The digital currency, which just turned eight years old, reached US$1,140.64, which was higher than the US$1,137 it hit in November of 2013

Trading firms in the United Kingdom and elsewhere outside the United States should continue to monitor ongoing efforts by U.S. regulators to assert long-arm jurisdiction over their trading activities. That’s the implication of a jury verdict recently obtained by the U.S. Securities and Exchange Commission (SEC) in SEC v. Sabrdaran et al. against a U.K.-based trader who used spread bets [1] to engage in insider trading in violation of the U.S. securities laws.

In our paper, we study the relation between corporate environmental performance, institutional ownership, and shareholder value in a sample of U.S. firms. Investors scrutinize corporate environmental policies more closely than they do other corporate actions that have social implications.

The goal of our study is to examine whether the corporations with political connections like AT&T are more likely to acquire the companies they bid on and enjoy regulatory advantage by avoiding delay or denial. More specifically, we argue that for merger deals which involve firms operating in different industries antitrust issues are unlikely.

This post introduces a new resource for parsing the Delaware General Corporation Law (DGCL): the simplified DGCL, freely available at http://simplifiedcodes.com.

The simplified DGCL is a re-write of the DGCL. It rearranges text and eliminates redundancies. As a result, it is less than half as long as the original, and hopefully much easier to read. In addition, it facilitates reading by breaking long paragraphs, inserting paragraph or subsection titles, and highlighting key terms.

REIT expansion and consolidation continued their steady march in 2016, and, based on the current pipeline, appear to be on track for a similar, steady pace in 2017. The wild cards, of course, are interest rates and political uncertainty. At the same time as they have scaled up, REITs have also grown in sophistication and in many cases have become models of good corporate governance and responsible stewardship. Of course, the landscape keeps evolving, and REITs, like other public companies, need to assess, adjust and address an ever-changing array of issues and challenges, some truly substantive and others mostly cosmetic.

Shareholder voting is increasingly used to settle governance issues, such as compensation, in a transparent and democratic way. Yet, it is well known that corporate elections do not even closely resemble political elections of modern democracies (Bebchuk, 2007).

As 2016 draws to a close, shareholder proponents and proxy advisors have begun laying the groundwork for the 2017 proxy season. Institutional Shareholder Services (ISS) and Glass Lewis recently released their U.S. voting policy updates which address a range of issues including directors’ outside board service, restrictions on the submission of binding shareholder proposals, governance provisions at newly public companies, and gender pay parity.

In late October, as expected, the SEC proposed proxy rule changes that would require that “universal proxy cards” be used in contested elections of directors, giving shareholders the ability to pick and choose among all of the nominees put forth by the company’s board and by a dissident shareholder when deciding how to vote.