June 8, 2009

“Shareholder Value” vs. “Value for Shareholders”: The Leaders Speak

Below is some important reading that has recently been brought to our attention that we commend to each of you. It shows that this country has some pretty amazing leaders:

1. Pepsi’s CEO Indra Nooyi, who was educated in India and then the Yale Business School, recently gave these impressive remarks about corporate values (you can watch Ms. Nooyi deliver them on this video).

2. JPMorgan’s CEO Jamie Dimon annual letter to shareholders is a “must” read, particularly starting on page 13. Note what Mr. Dimon says about compensation: “It also is clear that excessive, poorly designed and short-term oriented compensation practices added to the problem by rewarding a lot of bad behavior.” And see the steps he has taken at JPMorgan (at pg 26). When I saw the bullet about no special severance provisions, I remembered that he had a huge severance provision in his contract when he went from BankOne to JPMorgan in 2004. Well, I did a little research and sure enough, it turns out that he voluntarily gave it up in ’06 without any fanfare.

3. Roger Martin, Dean of the Rotman School of Management at Toronto puts a fresh lens on compensation and metrics in “Undermining Staying Power: The Role of Unhelpful Management Theories.” His important observations recently were summarized in this Financial Times article.

4. Finally, one of this year’s best media articles is this one entitled “The Executive Pay System is Broken” by Alistair Barr of MarketWatch. It explores possible solutions to fix executive pay and answers why it’s important to do so…

By the way, on the right side of the home page, we still maintain a group of complimentary videos of prominent leaders speaking out about excessive pay under the caption of “Respected Leaders Speak Out for Responsible Practices.” We just posted an extended video (i.e. 6 mins) of when Jesse Brill spoke out on how to fix pay practices recently on “The Today Show.”

Protecting Non-Qualified Deferred Compensation: Why is it Suddenly an Issue?

On his “Melbinger’s Compensation Blog” on, Mike Melbinger has been blogging a series about how Section 409A intersects with bankruptcy filings and causes a number of problems. Check it out.

May-June Issue of The Corporate Counsel

We just published the May-June issue of The Corporate Counsel. This issue includes pieces on:

– SEC Guidance on Shell Companies
– Augmenting the Schedule 13D/G Disclosure Requirements—Enhanced Advance Notice Bylaws
– Filing Form 10-Q With Non-Reviewed Financials—Impact on S-3/8 Eligibility
– Earnings Release and 10-Q Filing on Same Day—Impact on 8-K Item 2.02
– Merger Lock-Ups and Written Consents—Staff Iterates/Firms Up Its Position on Pre-Proxy Solicitation
– Voluntary Filer CDIs
– Staff Review Update
– The Staff’s Nine-Month IPO Dormancy “Rule”—Some Relief in Today’s Market
– Even if IFRS Roadmap Adopted, Don’t Expect Voluntary Early Switching to IFRS
– NSMIA Blue Sky Pre-Emption—Litigation Update
– Some Reverse Engineering of the Facebook and WorleyParsons RSU No-Action Letters

Try a half-price for “Rest of ’09” no-risk trial today to receive this issue and more.

– Broc Romanek