According to this article, finance executives attributed a 4.5% year-over-year increase in 2013 audit fees to review of manual controls resulting from PCAOB inspections and other PCAOB-related issues. The findings are based on this year’s FERF (FEI)/Audit Analytics Audit Fee Survey (paid publication), and include:
Public companies paid an average of $7.1 million in audit fees in 2013 – an increase of 4.5% over audit fees paid in 2012
60% of respondents were required to change their controls, and 80% changed their control documents as a result of the PCAOB’s requirements or inspection feedback
Public company audits required an average of 17,525 hours in 2013, at an estimated average cost of $249 per hour
Average audit fees of companies with centralized operations – both public and private – were found to be significantly less than those with decentralized operations. On average, public companies with centralized operations paid $3.9 million for their annual financial statement audits, while those with decentralized operations paid an average of $9 million
Public companies have used their audit firm for an average of 23 years
57% of public company respondents indicated an increase in internal cost of compliance with SOX within the past 3 years. However, many financial executives stated they believe they now have improved internal controls, making it worth the additional overall expense.
92% of public company respondents stated their boards annually assess their audit firm’s performance and independence qualifications
Podcast: Investor Views on Forward-Looking Information
In this podcast, Sandy Peters addresses a new report from the CFA Institute about investor perspectives on the use of forward-looking information in financial reporting, including:
– What historical developments prompted obtaining investors’ views about the use of forward-looking information?
– What are the report’s key findings?
– What does the CFA Institute plan to do with the findings, and what are the ultimate objectives?
– What should companies take away from this report?
More on “The Mentor Blog”
We continue to post new items daily on our blog – “The Mentor Blog” – for TheCorporateCounsel.net 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:
– Optimizing the Value of Internal Audit
– Why You Shouldn’t Decide Anything Important at Your Board Meeting
– Study: CEO Succession Planning
– A Section 5 Case: Memories of Law School
– SEC Bars Bad-Faith Conduct Whistleblower From Any Awards Eligibility (Common Sense Prevails!)
As has been widely reported, SEC Chair White recently delivered this speech about gender diversity on boards. In her speech, Chair White identified studies demonstrating the positive impacts on company performance associated with women on boards, and regulatory and investor-driven efforts to increase gender diversity. She also expressed her own views about how to effect and accelerate change.
Among the points I found particularly noteworthy were her observation of investor and other stakeholder disappointment in board diversity disclosures in proxy statements and how they should affirmatively react, and her express disagreement with – and response to – those who indicate that the lack of gender diversity on boards reflects the lack of suitable women candidates.
As to the former, she noted the SEC’s board diversity disclosure requirements in Item 407 of Regulation S-K, and then stated:
I do recognize, however, that there is also disappointment about the quality of some of the disclosures that companies provide. This is a shared responsibility. Shareholders and interested stakeholders have a responsibility to make it known that this is an issue that is important, that they want more information on what is being done to promote diversity, and, if not enough is being done, what actions they expect to be taken. There are a number of different avenues to make these views known – from direct engagement with public companies to shareholder proposals asking a company to establish more specific policies and commitments – and I encourage you to use all of them.
As to the dearth of women on boards, she indicated:
It is also important for companies to work harder to identify qualified women to serve on boards. Some defenders of the status quo still say that there are not enough qualified women to fill board vacancies at higher rates. I disagree. There is no shortage of highly qualified candidates. And if that is the view of any company, its nominating and governance committees should broaden their searches. The challenge is not a lack of suitable candidates. There is adequate supply, but, the challenge is creating real and committed demand.
Commissioner Aguilar similarly emphasized the board’s responsibility to actively seek diverse (women and ethnic minority) candidates in his 2010 speech on board diversity.
Chair White also mentioned that, based on survey data, there would be more opportunity in coming years to nominate women candidates due to increasing vacancies resulting from board term and age limit policies and the associated statistics (e.g., EY’s 2013 study indicating that 20% of S&P 1500 board seats are held by directors nearing or exceeding the common board retirement age of 72).
She concluded by noting that to effect real transformative change, investors and other stakeholders would need to seek change from companies, “and those who support this effort need to recognize those companies that are doing things right, and not just those that are not doing enough.”
See also this interesting new Paul Hastings study, which explores the role and influence that stock exchanges globally currently have – and could potentially have – on improving board gender diversity.
Directors Survey: Perceived Impediments to Gender Diversity
In contrast with Chair White’s view – as expressed in her recent speech – that there is no shortage of highly qualified women board candidates, a majority of directors in PWC’s latest annual directors survey indicated that there are no perceived impediments to increasing gender diversity, the balance cited lack of awareness of qualified women candidates as the top impediment to increased board diversity:
In general, what impedes a board’s ability to increase diversity?:*
Directors are unaware of many qualified diverse candidates
Directors don’t want to change the current board composition to create a position for a diverse candidate
There are insufficient numbers of qualified diverse candidates
Directors don’t view adding diversity as important
Board leadership is not invested in recruiting diverse directors
*Results shown from greatest impediment to least impediment
Also noteworthy is the fact that 61% of female directors described gender diversity as very important – compared to only 32% of male directors.
However, note that ISS’s just-released gender diversity report reveals measurable progress – particularly among S&P 500 companies, with women filling nearly 3 of every 10 vacancies so far in 2014, almost double the rate compared with 2008.
More on “The Mentor Blog”
We continue to post new items daily on our blog – “The Mentor Blog” – for TheCorporateCounsel.net 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:
– It’s Time to Fix the Very Pale, Very Male Boardroom
– The Risks of Too Much Risk Assessment
– Survey: Challenges with Complying with Internal Control Requirements
– No Link Between Interim CEO Appointment & Company Performance
– Surveys Show Need for Continued Focus on Effective Compliance Programs
As Steve Quinlivan notes in this blog, a new Corp Fin CDI 141.05 (Securities Act Rules) indicates that companies may use IP addresses to effectively limit their offers to particular states or territories to qualify for Rule 147’s intrastate offering exemption:
In a new CDI, the SEC indicates it may be possible to use IP addresses to control internet communications so that offers are made only in one state and qualify for the intrastate exemption under Rule 147. In Securities Act Rules CDI 141.05, Corp Fin states:
“Issuers could implement technological measures to limit communications that are offers only to those persons whose Internet Protocol, or IP, address originates from a particular state or territory and prevent any offers to be made to persons whose IP address originates in other states or territories. Offers should include disclaimers and restrictive legends making it clear that the offering is limited to residents of the relevant state under applicable law. Issuers must comply with all other conditions of Rule 147, including that sales may only be made to residents of the same state as the issuer.”
See also this Cooley blog, which addresses the practical implications of this CDI – i.e., the alleged difficulty in implementing these technological measures such that they serve as a reliable control.
SEC Charges Company With Accounting Fraud & Uses SOX Clawback
As described in this recent press release, the SEC charged Saba Software and two of its former VPs for an accounting fraud where management directed its Indian subsidiary’s consultants to falsify timesheets so that the company could hit its quarterly financial targets. Both the company and VPs agreed to settle the charges.
The SEC also used Sarbanes-Oxley’s Section 304 to claw back $2.5 million in incentive compensation and stock profits from the CEO, who was not charged with misconduct.
See also this Reuters article discussing the clawback, and noting SEC Enforcement Chief’s Andrew Ceresney’s remarks about the case, including the fact that it reflects “the SEC’s increased focus on financial reporting fraud” and underscores “the need for companies with offshore operations to have effective internal controls.”
Podcast: Shareholder Engagement on Executive Pay
In this podcast, Frank Glassner of Veritas discusses engaging with shareholders on executive pay, including:
– What do you think has caused the increase in shareholder engagement on executive pay issues?
– What are the advantages of engaging with shareholders?
– What are some of the pitfalls of engaging with shareholders?
– Is there a better than average method of engaging with shareholders?
– What would a best practice with shareholder engagement process look like, and what do you think companies should do?
I found this recent blog noteworthy because it discusses the influence of a CEO’s age on the company’s strategic direction – a previously inconclusive and undocumented association.
The article cites a new study (purchase required) of the S&P 1000, which demonstrates that older CEOs take fewer risks. Specifically, older CEOs invest less in research and development, make more diversifying acquisitions, manage companies with more diversified operations, and maintain lower operating leverage. Using the company’s stock price volatility as the indicator of risk, older CEOs are associated with less stock price volatility – less risk. Further, company risk and the riskiness of corporate policies are shown to be lowest when both the CEO and the next most influential executive are older, and highest when both are younger.
As noted in the blog, the author also identified a correlation between the company’s risk profile and its CEO hiring practices – i.e., lower risk profile companies tended to hire older (and presumably more risk-averse) CEOs, as compared to higher risk profile companies that tended to hire younger CEOs. That’s not to say that lower risk behavior is a better investment strategy. To the contrary – the study apparently determined that the risk-adjusted portfolios of companies managed by younger CEOs outperformed those managed by older CEOs.
The blogger’s bottom line: “Older CEO’s, who tend to make more conservative decisions, can be ideal stewards for firms seeking stability. But younger CEOs’ willingness to take on risky projects can pay off for shareholders in the long run.”
Study: Diverse Boards Are More Risk-Averse
Interestingly, this recent Workplace Diversity article also addresses the correlation between management and the company’s risk profile – but in a different way. It cites a soon-to-be-published study of more than 2,000 public companies that shows that companies with more diverse boards are less prone to taking risks (i.e., are more risk-averse), and more likely to pay dividends and have richer dividend policies.
Board diversity was defined broadly – to include gender, race, age, experience, tenure and expertise. Risk in this case was a function of each company’s capital expenditures, research and development expenses, acquisition spending, stock return volatility and accounting return volatility. Companies with more diverse boards spent less on cap-ex, R&D and acquisitions; exhibited lower stock price volatility; and were more likely to pay dividends and to pay greater dividends than those with less diverse boards – leading to the authors’ conclusion that, “In general, risk-averse firms are more likely to avoid investment projects with uncertain outcomes and return cash to shareholders in the form of dividends.”
The authors of the study acknowledge that taking risks is part of doing business, but caution that excessive risk-taking can jeopardize a company’s survival.
More on “The Mentor Blog”
We continue to post new items daily on our blog – “The Mentor Blog” – for TheCorporateCounsel.net 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:
– Strategies to Address SEC’s AQM-Triggered Scrutiny of Your Financial Reporting
– Creating a Formal Framework for Accounting Judgments
– How Boards Need to Evolve Over Time
– ISS QuickScore Data Reveals Key Governance Trends
– Director Orientation & Onboarding Considerations
Even if you are already familiar with their voting policies and policy-making processes, I found this King & Spalding memo noteworthy for the additional insights ISS and Glass-Lewis provided directly during their participation in a recent joint Lead Director Network/Compensation Committee Leadership Network meeting. Noteworthy points include:
– Involvement in developing customized voting policies
Both ISS and Glass Lewis work with investment managers to develop customized policies. Glass Lewis noted more than 80% of its 900 clients use a custom policy or process for their voting decisions. And ISS indicated: “Our house views are a benchmark, but most of the ballots [cast on the ISS voting platform] are either client-directed or based on a customized policy. Custom policies are a tremendous growth area for ISS.”
– Board tenure/refreshment
Notwithstanding ISS Governance QuickScore 2.0, which reveals ISS’s view that a director’s tenure of more than 9 years is considered to potentially compromise a director’s independence and so is deemed “excessive,” at the recent meeting, ISS noted a lack of investor interest in director term limits. According to the article, ISS indicated that “investors prefer to scrutinize new nominees on a case-by-case basis, e.g., asking why a board with no women just nominated another man.” And Glass-Lewis indicated that they look for evidence of investor concern about board refreshment or diversity – that their clients “‘look for more information on this [than just statistics].”’
– Recommending votes against directors
Director participants criticized – for several reasons – ISS’s and Glass Lewis’s policies to recommend votes against directors based on their committee membership, e.g., recommending votes against governance committee members when the company doesn’t follow certain governance practices. Directors effectively noted that the proxy advisors’ policies are inflexible, whereas companies are dynamic, and can unfairly target directors who were in fact not involved in the decision-making or were part of a full board decision-making process.
Glass Lewis responded by indicating that the alternative to recommending a vote against committee members was to recommend a vote against the entire board which, not surprisingly, didn’t generate a lot of enthusiam among the directors. ISS seemed to suggest that companies’ full disclosure about what they did would resolve the directors’ concerns; however, I think instead there is simply a huge disconnect between proxy advisory firms’ policy positions for recommending votes against directors and what directors believe is reasonable based on what actually transpires in the boardroom.
Board Tenure Considerations
This thoughtful, balanced memo about director tenure addresses some of the common arguments in favor of and against director term limits, and notes other considerations including international trends and results of studies about the impact of director tenure on board effectiveness. Although authored by a Canadian firm, the considerations apply equally to US companies.
The discussion of studies is particularly noteworthy in view of concerns expressed by some investors and proxy advisors that long tenure equates to a lack of independence from management and, thus, reduced oversight effectiveness. Along those lines, here is a excerpt from Wachtell Lipton’s recent article on director tenure, which logically concludes that the academic studies (footnoted in the article) are not conclusive:
Academic Studies
Academic researchers have examined the question of whether there is an optimal length of tenure for outside directors, with varying results. Studies from the 1980s through the 2000s have shown, for example, that longer tenure tends to increase director independence because it fosters camaraderie and improves the ability of directors to evaluate management without risking social isolation. A 2010 study confirmed that companies with high average board tenure (roughly eight or more years) performed better than those companies with lower average board tenure, and that companies with diverse board tenure performed better than those with homogeneity in tenure. A 2011 study, by contrast, examined a sample of S&P 1500 boards and found that long-serving directors (roughly six or more years)—as well as directors who served on many boards, older directors, and outside directors—were more likely to be associated with corporate governance problems at the companies they served.
One 2012 study found that boards with a higher proportion of long-serving outside directors were more effective in fulfilling their monitoring and advising responsibilities, while another 2012 study found that having inside directors increased a board’s effectiveness in monitoring real earnings management and financial reporting behavior, presumably due to their superior firm-specific knowledge and operational sophistication. On the related topic of board turnover, a recent study of S&P 500 companies from 2003 to 2013 found that companies that replaced three or four directors over the three-year period outperformed their peers. The study found further that two-thirds of companies did not experience this optimal turnover and that the worst-performing companies had either no director changes at all or five or more changes during the three-year period.
A 2013 study on director tenure by a professor from the INSEAD Business School has received significant attention. The study hypothesizes that there is a tradeoff between independence and expertise for outside directors—a prejudgment that is widely disputed—and examines the effect of tenure on the monitoring and advising capacities of the board. After review of over 2,000 companies, the author finds that the optimal average tenure for an outside director is between seven and 11 years, though industry- and company-specific factors create substantial variability. He concludes that nine years is generally the optimal point at which a director has accumulated the benefits of firm-specific knowledge but has not yet accumulated the costs of entrenchment. As a policy matter, however, he suggests that in light of the significant variations across industries and company characteristics, regulating director tenure with a single mandatory term limit would not be appropriate.
Taken together, the academic studies show that conclusions about optimal director tenure are elusive. Common sense indicates that a board should use tenure benchmarks not as limits but as opportunities to evaluate the current mix of board composition, diversity, and experience.
Webcast: “The Art of Negotiation”
Tune in tomorrow for the DealLawyers.com webcast – “The Art of Negotiation” – during which during which Cooley’s Jennifer Fonner Fitchen, Perkins Coie’s Dave McShea and Sullivan & Cromwell’s Krishna Veeraraghavan will teach you how to negotiate with the best of them in a chock-full of practical guidance program.
Continuing a several year trend, this EY report shows that an increasing number of Fortune 100 companies are providing non-required and increasingly robust disclosure in their proxy statements about their audit committees and audit committee oversight practices.
The report, the latest in a several year series, notes that increased transparency is being driven by a number of factors and constituencies in the interest of – among other objectives – enhancing investor confidence in audit committee oversight work; improving communication with investors about audit committee responsibilities (including external auditor oversight); and better informing shareholders in their consideration of auditor ratification proposals.
Among the highlighted dislosure practices are:
– Centralization of audit committee-related disclosures in an “audit-related” section of the proxy statement or the audit committee report
– Improved accessibility of the audit committee charter via a direct link
– Increased transparency about external auditor oversight practices, for example:
Auditor selection
46% of companies explicitly state their belief that their selection of the external auditor is in the best interest of the company and/or shareholders, up from 4% in 2012
44% of companies disclosed that the audit committee was involved in the selection of the audit firm’s lead engagement partner – compared to 1% in 2012
31% of companies explained the rationale for appointing their auditor, including the factors used in assessing the auditor’s quality and qualifications, compared to 16% in 2012
Approval of engagement fees and terms
80% of companies noted that they consider non-audit services and fees when assessing the independence of the external auditor.
19% of companies disclosed that the audit committee was involved in the auditor’s fee negotiations, up from just 1% in 2012
Auditor Tenure
Auditor tenure was disclosed by 50% of companies – up from 26% in 2012
28% of companies disclosed that the audit committee considers what the impact would be of rotating their auditor – up from 3% in 2012
A table on page 3 of the report shows three-year comparisons for these and additional audit committee-related disclosures.
Prior year reports and additional resources about audit committee disclosure are available in our “Audit Committees” Practice Area.
Podcast: Audit Committee Disclosure
In this podcast, Allie Rutherford discusses audit committee disclosure trends based on EY’s review of 2014 Fortune 100 proxy statements, including:
What were the key findings?
Were there any major surprises?
What do you believe are the primary drivers behind the increased disclosure?
Do you think that the trends are limited to larger companies?
What do you expect to see going forward?
More on “The Mentor Blog”
We continue to post new items daily on our blog – “The Mentor Blog” – for TheCorporateCounsel.net 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:
– PSLRA: Ineffective Motions to Dismiss
– Top Ten List of D&O Coverage Questions for Directors
– Bylaws Mandatory Arbitration Clauses Gaining Ground
– Survey: Board Tenure & Governance
– Weighing Pros & Cons of a Dual-Class Structure
Call me naive, but I was surprised and disappointed to read in this blog that, not only had a dispute arisen among three “joint” whistleblowers about splitting the proceeds of an SEC whistleblower award, but that the dispute among two of the three has now manifested itself in the form of litigation.
As noted, the complaint alleges that three people jointly developed information about a fraud committed in conjunction with an investment scheme. As the story goes, they initially planned to apply for a whistleblower award with the SEC on behalf of an entity in which they all had an interest. However, upon learning that the SEC rules require whistleblower award applications be submitted by individuals (not companies or other entities), they allegedly agreed that one of them (the defendant) would submit the application in his name, with the understanding that – upon receipt of any whistleblower award – all three would share in the proceeds.
To make a long story short, the SEC granted a $14.7 million award, which the defendant then refused to share with the other joint whistleblowers. The defendant allegedly settled with one of the two other whistleblowers, and the other then filed this suit. In response, the defendant filed this motion for a more definite statement or dismissal, which indicates:
“Plaintiff’s Complaint is an unintelligible assortment of confusing statements. While ostensibly bringing a claim for breach of contract, Plaintiff dedicates his complaint to unrelated allegations. The claims sounds like the claims of co-workers who are trying to claim a portion of a co-workers lottery winnings because they work together.”
What next? Particularly given this litigation; the recent, very arguably excessive $30 million award to a foreign whistleblower; and my own in-house experience (wherein whistleblowers played a memorable role), I am inclined to believe that the UK’s assessment and rejection of the US whistleblower bounty scheme, which I blogged about previously, has some merit.
See also this recent Speechly Bircham memo about the SEC’s $30 million award, and the UK’s contrasting approach.
What Does It Take to Incentivize a Whistleblower?
As noted in this Venable alert, now outgoing Attorney General Eric Holder is seeking an increase to the $1.6 million cap on whistleblower awards available for financial fraud under FIRREA (Financial Institutions Reform, Recovery and Enforcement Act) – akin to those available under the False Claims Act (i.e., 25-30% of the amount the government recovers). FIRREA was rarely used until the aftermath of the 2008 financial crisis, when it was used for recent, significant actions against, e.g., JP Morgan, Citigroup and Bank of America.
Holder apparently believes that the $1.6 million cap isn’t sufficient to incentivize would-be whistleblowers to come forward – thereby tempering the DOJ’s ability to learn about, investigate and stop misconduct before it evolves into a crisis. It’s difficult to know whether that’s the case given FIRREA’s historically low profile (and, accordingly, perhaps, low level of awareness), and the fact that, according to this WSJ article, there have been no known whisteblower awards to date made under FIRREA.
The article notes this reaction by former DOJ lawyer Andrew Schilling to the suggested increase:
Mr. Schilling said the attorney general’s proposal “raises the question whether the Firrea bounties are too low or whether those others [e.g., False Claims Act, Dodd-Frank Act] are too high. A lot of people would say you don’t need a $500 million reward to incentivize someone to come forward. You’d have to worry about the credibility of a whistleblower who would come forward only if they’re offered $50 million.”
As the WSJ article indicates, senior DOJ officials Marshall Miller and Leslie Caldwell also made notable speeches the same day as Attorney General Holder’s (but to different lawyer audiences) encouraging whistleblowing on white-collar crime. See also this DealBook post, which addresses the DOJ’s focus in these speeches on pursuing individual – not just corporate – culpability.
Transcript: “Cybersecurity Role-Play: What to Do & Who Does What, When”
We have posted the transcript for the recent webcast: “Cybersecurity Role-Play: What to Do & Who Does What, When.”
Back in May, I blogged about a flap over Coca-Cola’s equity compensation plan. Showing how shareholder engagement works, the company announced this morning that its Compensation Committee has adopted “Equity Stewardship Guidelines” for the company’s equity plan.
Perhaps just as interesting is that the Compensation Committee Chair pushed out a blog on the company’s “Unbottled” blog about the announcement.
This looks to be a pretty innovative approach to explaining how shares under the equity plan will be used responsibly, while addressing the criticism about the plan. In addition to including a burn rate commitment that is expected to make the plan last its full term of 10 years, the Guidelines provide that Coca-Cola will include information on actual dilution, burn rate and overhang in their proxy statement each year. Plus they will continue to minimize dilution through share repurchases and encourage an open dialogue with shareholders about compensation. I look forward to seeing what they do in their next proxy statement…
All of the video archives from our two days of executive pay conferences are now posted…
U.S. securities regulators quietly granted Citigroup waivers from restrictions that would have crimped a range of the bank’s activities, including selling investments in hedge funds to individuals, following a recent securities-fraud settlement. The Securities and Exchange Commission, which in August completed a $285 million settlement with Citigroup over allegations related to complex debt instruments, granted the waivers late Friday.
The relief allows Citigroup to resume selling investments in hedge funds and private-equity funds to wealthy clients. The bank also retains its special status as a “well-known seasoned issuer,” or WKSI, which allows large companies to quickly issue stocks or bonds without the speed bump of an SEC review of their offerings. Kara Stein, a Democratic commissioner, dissented on granting Citigroup the expedited filing status, according to a person familiar with the matter.
Citigroup became subject to new restrictions in August, after a federal judge approved the SEC’s 2011 settlement with Citigroup over the sale of certain collateralized debt obligations to clients in late 2006 and early 2007. Under the SEC’s bad actor rule, parties with a “a relevant criminal conviction, regulatory or court order, or other disqualifying event” are restricted from participating in a private offering. The rule, adopted last year, is part of the 2010 Dodd-Frank regulatory overhaul.
Citigroup told clients in August it was working with the SEC to resolve the restrictions over the bank’s sale of hedge funds. The five-member SEC unanimously granted Citigroup its request for a waiver to resume selling so-called private fund investments, accepting the bank’s arguments that its $285 million settlement didn’t involve intentional misconduct or a large number of employees. The SEC grants waivers to let firms conduct normal business, as long as the waiver is seen as being in the public’s interest. The SEC also allowed Citigroup to retain its “WSKI” status, removing a restriction that applied to the bank given the SEC’s finding that Citigroup violated antifraud provisions of U.S. securities laws. Firms found to have violated those laws typically have their special status revoked for three years but are granted the option of appealing the decision.
The agency was divided that waiver, however, with Ms. Stein dissenting. She has repeatedly argued the agency has been too lenient on the largest financial institutions and voted against providing a well-known seasoned issuer waiver for the Royal Bank of Scotland Group PLC earlier this year after the firm reached a $612 million settlement with U.S. and U.K. regulators over allegations that traders at the bank tried to rig interbank lending rates. “Our website is replete with waiver after waiver for the largest financial institutions,” Ms. Stein said at the time, warning the commission’s decision to overturn RBS’s disqualification “may have enshrined a new policy—that some firms are just too big to bar.”
As with the hedge-fund waiver, the SEC granted the expedited filing waiver because the bank’s misconduct was limited in scope and confined to a small group of employees, a person familiar with the matter said. The SEC and Citigroup reached a $285 million settlement in 2011, but U.S. District Judge Jed Rakoff rejected it, saying the terms were “pocket change to any entity as large as Citigroup.” On Aug. 5, following a reversal of that ruling by an appellate court, Judge Rakoff approved the settlement.
Our October Eminders is Posted!
We have posted the October issue of our complimentary monthly email newsletter. Sign up today to receive it by simply inputting your email address!
Today is the “Say-on-Pay Workshop: 11th Annual Executive Compensation Conference”; yesterday was the “Annual Proxy Disclosure Conference” – and the video archive of that Conference is already posted. Note you can still register to watch online by using your credit card and getting an ID/pw kicked out automatically to you without having to interface with our staff. Both Conferences are paired together; two Conferences for the price of one.
– How to Attend by Video Webcast: If you are registered to attend online, just go to the home page of TheCorporateCounsel.net or CompensationStandards.com to watch it live or by archive (note that it will take about a day to post the video archives after it’s shown live). A prominent link called “Enter the Conference Here” – on the home pages of those sites – will take you directly to today’s Conference (and on the top of that Conference page, you will select a link matching the video player on your computer: Windows Media or Flash Player). Here are the “Course Materials,” filled with talking points and practice pointers.
Remember to use the ID and password that you received for the Conferences (which may not be your normal ID/password for TheCorporateCounsel.net or CompensationStandards.com). If you are experiencing technical problems, follow these webcast troubleshooting tips. Here is today’s conference agenda; times are Pacific.
– How to Earn CLE Online: Please read these FAQs about Earning CLE carefully to see if that is possible for you to earn CLE for watching online – and if so, how to accomplish that. Remember you will first need to input your bar number(s) and that you will need to click on the periodic “prompts” all throughout each Conference to earn credit. Both Conferences will be available for CLE credit in all states except for a few – but hours for each state vary; see the CLE list.
ISS: New Policy Survey Results
Yesterday, ISS released its 2014-2015 policy survey results. 21 pages of interesting data (ie. key findings and detailed survey responses). Here’s analysis from Davis Polk’s Ning Chiu…
Today In “Hmmm”: Auditor Dismissed for Finding Internal Control Deficiencies
This Bloomberg article entitled “Munger Likens Auditor to Doctor Prodding Groin to Treat Nose” caught my eye. Charlie Munger is Warren Buffett’s right-hand man who also owns Daily Journal Corp. – and he fired E&Y after the auditor had determined there were flaws in the company’s accounting for acquisitions and deferred tax provisions (here’s the Form 10-K). Don’t like it when the auditor finds internal control deficiencies? Fire the auditor…
Today is the “Tackling Your 2015 Compensation Disclosures: Annual Proxy Disclosure Conference”; tomorrow is the “Say-on-Pay Workshop: 11th Annual Executive Compensation Conference.” Note you can still register to watch online by using your credit card and getting an ID/pw kicked out automatically to you without having to interface with our staff. Both Conferences are paired together; two Conferences for the price of one.
– How to Attend by Video Webcast: If you are registered to attend online, just go to the home page of TheCorporateCounsel.net or CompensationStandards.com to watch it live or by archive (note that it will take about a day to post the video archives after it’s shown live). A prominent link called “Enter the Conference Here” – on the home pages of those sites – will take you directly to today’s Conference (and on the top of that Conference page, you will select a link matching the video player on your computer: Windows Media or Flash Player). Here are the “Course Materials,” filled with talking points and practice pointers.
Remember to use the ID and password that you received for the Conferences (which may not be your normal ID/password for TheCorporateCounsel.net or CompensationStandards.com). If you are experiencing technical problems, follow these webcast troubleshooting tips. Here is today’s conference agenda; times are Pacific.
– How to Earn CLE Online: Please read these FAQs about Earning CLE carefully to see if that is possible for you to earn CLE for watching online – and if so, how to accomplish that. Remember you will first need to input your bar number(s) and that you will need to click on the periodic “prompts” all throughout each Conference to earn credit. Both Conferences will be available for CLE credit in all states except for a few – but hours for each state vary; see the CLE list.
What People Are Really Doing When They’re on Earnings Calls
This article from the Harvard Business Review is pretty interesting.
