October 6, 2017

The (Very) Pregnant Securities Lawyer

Some of you might know that I’m rolling into “Week 38” of my second pregnancy…the “home stretch.” For all the parents out there – especially moms – you know that balancing your pregnancy & profession can present some unique issues. Here are 4 things I’ve experienced:

1. To-Do Lists: At this point, these are growing faster than the baby. There’s the work list, the mom/baby healthcare & benefits lists, the nursery list, etc. It can be overwhelming, especially since all the tasks have the same imminent – but unknowable – deadline.

With our firstborn, I managed to wrap up my work projects (and report for jury duty!) just before the baby’s early arrival. But, we were “those people” who didn’t have a name picked out & installed the car seat in the hospital parking lot. This time, I’d love to have 10 minutes of downtime to mentally prepare for the new person who’s joining our family. I’m not there yet – but there’s still hope.

2. Transition Mechanics: I’ve benefitted from good parental leave policies, but there’s an art to making this work. Good colleagues & relationships are key, since it’s scary to entrust your work and clients to someone else. You want to know they’ll do a great job but also that your position is secure and your clients will still want to work with you when you return. You’re also well-aware that you’re asking big favors. Co-workers are taking on extra work – with limited background and without an obvious long-term incentive. Clients are dealing with someone they don’t know, who might not have the entire backstory for on-the-fly questions.

It’s best for everyone if you’re extremely organized going into leave (more to-do lists, plus contact lists). Discuss expectations with clients & colleagues – separately & during intro calls. I also continued to monitor e-mail and was available for questions during leave. People are pretty respectful, but they like knowing you won’t hang them out to dry. Small thank-you gifts also never hurt.

3. Awkward Networking: I don’t like being pregnant in a professional setting. Pretty much everyone stares at and/or comments on your body. This doesn’t bother me much if the other person is relating to me as a fellow parent – maybe it’s even a good icebreaker – but you still need a tactic for redirecting the conversation to any professional topics you wanted to cover. And always have a stock response ready for people who aren’t as smooth. Because the cruel irony is that you can’t just smile and take a big drink of wine…

4. Mixed Feelings: Don’t get me wrong, I love our two-year-old more than life and I’m grateful and excited for the opportunity to care for another little person. But parenthood isn’t always easy or fun, the world isn’t always kind, and experiencing all that love also requires a lot of vulnerability.

On top of that, there’s the postpartum identity crisis – during which you try to reconcile your ambitious, always-available, pre-baby self with the realities of limited time & sleep, as well as whatever you & society think a mother/parent should look like. There’s a tension between proving yourself all over again and setting boundaries that allow you to actually enjoy your family. Both are necessary and evolve over time. As a woman in an historically male-dominated profession, I’m also constantly thinking about how my attitude, day-to-day actions & career decisions might impact my kids’ ambitions and worldview.

But there’s upside: the transition is a chance to examine your goals – and decide how to maximize your potential. Plus, you might be more creative & efficient.

I know I’m not alone on this journey of balancing pregnancy, parenthood & lawyering – email me with any experiences & “lessons learned” that you want to share!

Corp Fin’s “Partial” Global Rule 13e-4 Relief

Here’s something that Broc blogged yesterday on the “ Blog“: Whenever Corp Fin’s Office of Mergers & Acquisitions posts a new no-action response, I take a gander to see if it’s new or unusual. Typically, they aren’t – and this new response to CBS falls within that category. It’s basically one of the formula pricing variety (albeit in the Reverse Morris Trust exchange offer context).

The Staff’s relief allows for the bidder/issuer to offer a number of shares in exchange based on the dollar amount of securities tendered – and relies on “formula pricing” mechanisms going back to the old Lazard Frères no-action letter from the 1980’s while utilizing the “pricing goes hard at least two days prior to expiration.”

So nothing surprising here, except the last paragraph in the no-action letter which states the Staff will no longer be issuing no-action letters for parts of this area. The global relief is somewhat narrow – it covers only Day 18 VWAP pricing in a RMT. So issuers can go on their own if they fit within the letter’s facts. Be careful – the request doesn’t expressly give global relief for Day 20 VWAP pricing, which has a few more conditions under Staff precedents.

This is clearly a sign that Corp Fin is looking to get out of the business of issuing timing-consuming no-action letters in situations where there is a well-trodden path of letters…

Speaking of the Staff, don’t forget to tune in next Wednesday, October 11th for the webcast – “Evolution of the SEC’s OMA” – to hear current & former Chiefs of the SEC’s “Office of Mergers & Acquisitions” discuss what that job is all about. Join Corp Fin’s Michele Anderson and Ted Yu, as well as Skadden’s Brian Breheny, Weil Gotshal’s Cathy Dixon, Alston & Bird’s Dennis Garris and Morgan Lewis’ David Sirignano. This is a unique event!

Do EPS Incentives Discourage CapEx?

This Goldman Sachs video suggests we’re in a period of declining capex – for the first time since the early 90s. Some think that’s because shareholders prefer dividends and buybacks over long-term investments. This Dealbreaker article suggests there’s also a connection to incentive pay structures:

How executives are rewarded has a real impact on capital allocation. When a CEO’s bonus is tied to earnings per share – a metric that can be juiced by gobbling up shares – that company will likely to do more and bigger buybacks. And when companies appear to buy back shares in order to avoid a negative earnings surprise, capex spending tends to be diminished in the following year. Executives whose personal wealth moves in tandem with their company’s stock price show a particular preference for repurchases over capital expenditures. Larry Fink has a term for this.

If this criticism sounds familiar, it’s because the potential use of buybacks to support stock prices became a “hot topic” a couple years ago. Here’s one of Broc’s blogs discussing it.

Liz Dunshee