June 10, 2014

“Should CEOs Even Be on Boards?” v. “Should CEOs Conduct CEO Successions?”

Perhaps not as good a battle as “What If Conan Met Thor?” – but it has to be up there. Recently, two different articles brought two extremes to my attention. First, this blog by the “Activist Investor” stated a belief that CEOs shouldn’t serve on the board at all, much less serve as the board chair. Then, this Laurel Hill article analyzed a WSJ article entitled “The Hottest Corporate Fad: Pay CEOs to Find Successors.” In essence, the boards in these cases arguably are paying the CEO to do its job. Shoot me an email with your opinion on either (or both) of these topics. I will keep them to myself – but I’m curious what others think…

Study: A 13-Year Comparison of Restatements

In a recent study, Audit Analytics looked back over 13 years of restatements and, among other things, found:

– In the last four years, the quantity of restatements has leveled off and severity has remained low, but restatements have increased from accelerated filers for the third straight year.
– During 2010, 157 accelerated filers disclosed restatements, followed by 210 in 2011; 282 in 2012 and 290 in 2013.
– During 2013, Revision Restatements (restatements revealed in a periodic report without a prior 8-K, Item 4.02 disclosure that past financials can no longer be relied upon) represented about 68.8% of the restatements disclosed by 10-K filers. This percentage represents the highest percentage calculated since the disclosure requirement came into effect August 2004.
– During 2013, the average income adjustment per restatement by publicly traded companies (on Amex, NASDAQ, or NYSE) was about 3.2 million dollars, the lowest during the last seven years reviewed.
– During 2013, about 52.8% (235 out of 445) of the restatements disclosed by publicly traded companies (on Amex, NASDAQ, or NYSE) had no impact on earnings, the highest during the last seven years reviewed.
– The average number of days restated (the restatement period) was 548 days during 2013, the sixth year in a row with a period above but near 500 days.

Webcast: “Underwriter’s Counsel: Latest Developments”

Tune in tomorrow for the webcast – “Underwriter’s Counsel: Latest Developments” – during which White & Case’s Colin Diamond, Cravath’s LizAnn Eisen and Davis Polk’s Joe Hall will explore the latest developments that impact underwriter’s counsel, including negotiating the underwriting agreement, obtaining a comfort letter and making filings with FINRA.

– Broc Romanek