October 4, 2019

Pay Ratio: Bernie Sander’s “Tied to Higher Corporate Taxes” Campaign

As it has for the past few election cycles, executive compensation is working itself into the 2020 Presidential campaign. Bernie Sanders announced a proposal this week that would increase the corporate tax rate if a large company’s pay ratio is 50x or more (it would apply to any public or private company with more than $100 million in revenue). Here’s some news articles about it:

VOX’s “Bernie Sanders wants to tax companies that pay their CEOs way more than their workers”
NY Times’s “Sanders Proposes Corporate Tax to Address Pay Gap at Big Companies”
Washington Post’s “American CEOs deserve a pay cut. Bernie Sanders has a plan to make that happen.”
Business Insider’s “Bernie Sanders unveils ‘inequality tax’ targeting companies where CEOs make far more than workers”

SEC Enforcement: You Didn’t Disclose Your Scam

If you follow the SEC’s Enforcement actions, you find quite a few that can be entertaining. As Cooley’s Cydney Posner blogs, this one involving Marvell Technology is interesting because the company ran a “revenue management scheme” and the SEC took action not because of the scheme itself, but rather because the company failed to publicly disclose the scheme in its MD&A (or to disclose its likely impact on future performance). The SEC’s order demonstrates that, even if a scheme involving unusual sales practices may not amount to chargeable accounting fraud, failure to disclose may be actionable..

More on “Proxy Season Blog”

We continue to post new items on our blog – “Proxy Season Blog” – for members. Members can sign up to get that blog pushed out to them via email whenever there is a new entry by simply inputting their email address on the left side of that blog. Here are some of the latest entries:

– Firearms Responsibility: Will Shareholders Show Renewed Interest?
– Proxy Voting: Impact of Mutual Fund Board Connections
– Uncontested Director Elections: Impact of Negative ISS Recommendations
– Proxy Plumbing: Recommendations From SEC’s “Investor” Subcommittee
– Shareholder Engagement: A UK Study of Investor Trends

Broc Romanek