Corporate governance - Vigil

On August 5, 2015, the Securities and Exchange Commission (SEC) adopted its much-anticipated final rule implementing the pay ratio disclosure requirement of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act). Section 953(b) of the Dodd-Frank Act instructed the SEC to adopt rules requiring reporting companies to disclose the median of the annual total compensation of all company employees other than the company’s chief executive officer (CEO), the CEO’s annual total compensation and the ratio between these two numbers.

Delaware courts have recently issued critical guidance regarding the contours of the demand excusal doctrine. The following cases outline the Delaware courts’ recent analyses on the issue.

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Two U.S. hedge funds are seeking a number of changes at packaging-products maker Intertape Polymer Group Inc. to boost shareholder value, but they said they don’t currently plan a proxy fight for board representation.

In our paper, Employee Rights and Acquisitions, which was recently featured in the Journal of Financial Economics, we consider incentive conflicts involving employees, and how they may affect firms in the context of acquisitions. More specifically, we look at the effects of variation in employee protections on shareholder value, the choice of targets, and deal characteristics.  We focus on acquisitions since they are major firm investment decisions with the potential to substantially affect firm value.

In late October, the Securities and Exchange Commission announced that under the leadership of chair Mary Jo White and enforcement director Andrew Ceresney, the SEC has continued to ramp up enforcement activity. In its 2015 fiscal year, the SEC reported filing a total of 807 actions for the year—including 507 independent enforcement actions, 168 follow-on actions, and 132 actions for delinquent filings—resulting in $4.19 billion in monetary penalties and disgorgements.

I’m pleased to share an article published in Governance.  Considered to be
the leading source of information about corporate governance world-wide,
I’m grateful to Lesley Stephenson and her team for including this in their
October issue.

My paper continues the theme that governing and directing are different. 
In it I propose a new way to analyse how well a company manages the
potentially contradictory elements of assurance and management with
directorship and leadership.

Click on the im

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New York, November 10, 2015 -- Shareholder activism is set to reach a record high in 2015, with primarily credit-negative implications for companies and credit investors alike, says Moody's Investors Service.

The same strategy underpins a new interdisciplinary certificate offered this fall through Simon Fraser University’s Beedie School of Business, in collaboration with five faculties and a campus-based student incubator. Starting in second semester, undergraduate students from across campus can earn the seven-course certificate while completing their bachelor degree.

In Quadrant Structured Products Company, Ltd. v. Vertin (Oct. 20, 2015), the Delaware Court of Chancery, in a post-trial decision, rejected Quadrant’s challenges to transactions by Athilon Capital Corp., with Athilon’s sole stockholder (private equity firm Merced), after Athilon had returned to solvency following a long period of insolvency. Merced held all of Athilon’s equity and all of its junior notes; and both Quadrant and Merced held the company’s publicly traded senior notes. Quadrant challenged Athilon’s (i) repurchases of senior notes held by Merced (the “Note Repurchases”) and (ii) purchases of certain relatively illiquid securities owned by Merced (the “Securities Purchases”). A majority of the Athilon board that approved the challenged transactions was viewed by the court as non-independent (with two directors affiliated with Merced; the Athilon CEO; and two independent directors). Vice Chancellor Laster, applying New York law, rejected (i) Quadrant’s claims that the Note Repurchases (a) were prohibited by the indenture and (b) were fraudulent conveyances; and (ii) Quadrant’s derivative claim that the Note Repurchases and the Securities Purchases constituted a breach of the directors’ fiduciary duties.