November 12, 2020

Survey Results: Signature Authority Thresholds

We’ve wrapped up our latest survey relating to signature authority thresholds. Here are the results:

1. What is your company’s market cap?

– Less than $300M – 17%
– $300M – $2B – 21%
– $2B – $10B – 21%
– $10B – $100B – 34%
– More than $100B – 7%

2. What is the dollar threshold requiring board approval for acquisitions?

– Less than $10M – 43%
– $10M – $25M – 21%
– $25M – $50M – 11%
– $50M – $100M – 7%
– $100M – $250M – 11%
– $250M – $1B – 7%
– More than $1B – 0%

3. Does your board have the same or different dollar thresholds requiring board approval for the following categories: acquisitions, financing transactions, general contracts, and real estate?

– Same – 38%
– Different – 62%

Please take a moment to participate anonymously in these surveys:

Human Capital Management & Metrics
Insider Trading – Covid-19 Adjustments

For more on human capital management, be sure to check out today’s webcast “The Top Governance Consultants Speak” & next month’s webcast “Modernizing Your Form 10-K: Incorporating Reg S-K Amendments.”

ESG: 2021 Investor Trends

This SquareWell Partners report addresses investor approaches to ESG issues during 2020 and predicts how they will shape the dialogue between companies & shareholders during the upcoming year.  This excerpt address investors’ increasing focus on capital allocation decisions:

As the impacts of COVID-19 will continue and the ‘V’-shaped recovery looking less likely, capital allocation decisions will require a delicate balancing act for companies in 2021 to manage the diverging expectations of its stakeholders (especially within its shareholder base regarding the payment of dividends).

Companies will be expected to justify their capital allocation decisions, whether it is to remunerate shareholders or not. Whilst investors like Schroders have communicated that they would be more flexible regarding capital raising requests, other investors (and proxy advisors) will scrutinize the management quality, urgency of the funds, and the long-term strategy before supporting any capital raise (as in the case at French mall operator, Unibail-Rodamco-Westfield).

The report cautions that while investors demonstrated restraint during the current year, 2021 will likely be a critical year during which investors will pass judgment on corporate actions or failures to act in response to the crisis.

Rule 10b5-1 Plans: No Affirmative Defense to Bad Publicity

Pfizer’s announcement earlier this week about the apparent efficacy of its Covid-19 vaccine is the best news the market – and the world – has heard this year.  That announcement helped fuel a stock market surge, and according to media reports, Pfizer’s CEO & another executive sold a sizeable amount of the company’s shares during the rally.

The more thoughtful coverage of these sales pointed out that they were made under the terms of pre-existing Rule 10b5-1 plans, but the situation provides another example of the fact that whatever else a 10b5-1 plan does, it doesn’t provide an affirmative defense against bad publicity.

John Jenkins