Most companies view shareholder lawsuits, and any legal action against them, as a bad thing. And they have a point. But in a recent suit it was suggested that it is actually possible for a company to benefit from a suit if it leads to significant structural changes in the way that it conducts business. In this case, the ‘benefits’ were governance changes forcibly implemented as part of the settlement.
The true benefits of corporate governance have been under deb...
Recent articles
No matter how brilliantly IROs refine their techniques, they keep bumping up against brick walls. Communicating directly with shareholders is a perennial barrier. Efforts to ID investors can resemble a game of Battleship, where information is discovered after rounds of guesswork.
No wonder there are moves afoot to unmask beneficial shareowners who own their stock in ‘street-name’ through a nominee broker. In April 2004 the Business Roundtable petitioned the SEC ...
In the beginning, companies issued annual earnings guidance along with other financial information. This system worked for many years. Then came more volatile financial markets. At the demand of sell-side analysts who were finding it harder to predict companies’ performance in the short term, the companies began to issue quarterly guidance. This remained common practice at most companies for some time. But then the demand for information became even more intense, and per...
The SEC adopted e-proxy rule amendments in January 2007 in order to provide corporate issuers with the opportunity to save a potentially significant amount of money on printing and postage costs. As per the SEC’s press release, the new model requires a company to post its proxy materials on a website, and send a ‘notice of internet availability of proxy materials’ to shareholders at least 40 days before the meeting date. The SEC also states: ‘A proxy card may not a...
In a situation that might come as a shock to many mid-Atlantic residents, California has become the center of the universe, at least as far as unclaimed property is concerned. The state has been the focus of considerable debate and a growing legal storm over reclamation of unclaimed bonds, stocks, payroll checks, insurance payouts and other financial payouts.
Unclaimed property, not always at the top of the corporate secretary’s or general counsel’s focus ...
Last summer, when Pfizer announced that its directors would meet ‘face-to-face’ with representatives of the pharmaceutical giant’s largest shareholders to discuss executive compensation and other board performance issues, the governance community sat up and took note. Many praised Pfizer for its openness, a few groused that the invitation-only event left retail and small investors in the cold, and Martin Lipton, co-founder of Wachtell, Lipton, Rosen & Katz,...
Management groups speak with confidence. Regulators promise certainty. Shareholder activists talk of possible litigation. What does it all mean?
It seems the SEC’s recent amendment to Rule 14a-8(i)(8) has brought less certainty than the Commission had hoped regarding whether bylaw amendments requiring companies to put qualifying shareholder nominations on the proxy may be excluded from that same proxy by management.
Institutional shareholders have lo...
Amid the chaos of the Delphi Corporation bankruptcy, there has been an intriguing development of interest to anyone involved in setting or critiquing executive pay. Following a hearing, federal bankruptcy Judge Robert Drain of New York’s Southern District agreed to approve Delphi’s bankruptcy exit plan only if the company significantly slashed executive incentives from $87 million to $16.5 million. It was a rare example of a court cutting executive pay in a Chapt...
When credit markets dried up briefly in the summer of 2006 it caused significant ripples throughout the world’s financial system, raising concerns that even the huge hedge fund sector might run into financial difficulty. The event passed with a handful of spectacular blowouts, but few, if any, serious structural problems. A few firms had to quietly withdraw, but that is not an unusual situation given that there are now over 10,000 hedge funds vying for advantage ...
Move over hedge funds. Sovereign Wealth Funds (SWFs) are bigger investors now. Massive, mysterious – and possibly misunderstood – SWFs have the world financial markets in a tizzy. Concerns abound over the heated debate sparked by SWFs at the World Economic Forum in Davos, Switzerland, and the embers continue to smolder.
On the surface, demands for SWF transparency and governance are fueling global outcries. However, subliminal issues such as fear and appre...
