– impose a structure,
– assist board/committee in compliying with fiduciary duties,
– help ensure legal compliance, and
– give attorney-client privilege protection, when necessary.
Check it out and give Mike and Eric your feedback…
Study: Reissuance Restatements vs Revision Restatements
In this recent study, Audit Analytics conducted research about the various types of restatements and, among other things, found the following:
– In 2009, 44% of Reissuance restatements (those requiring an 8-K, Item 4.02 disclosure because past financial statements could no longer be relied upon) were issued in the subsequent Form 10-K instead of a 10-K/A.
– Since 2005, both Reissuance restatements and Revision restatements (those not requiring an 8-K, Item 4.02 disclosure) have declined, but Revision restatements have increased as a percentage of overall adjustments.
We just mailed the hard copies of Lynn, Borges & Romanek’s “2011 Executive Compensation Disclosure Treatise & Reporting Guide” to those that ordered it. As you can imagine, our members believe this is a critical resource for this proxy season. This hard copy of the 2011 Treatise is not part of CompensationStandards.com and must be purchased separately – however, CompensationStandards.com members can obtain a 40% discount by trying a no-risk trial now. We will then quickly deliver this 1000-plus page comprehensive Treatise as soon as you try the trial.
If you need assistance, please call our headquarters at (925) 685-5111 or email info@compensationstandards.com.
We are grateful that our blog has made the ABA Journal’s Blawg 100 for the third year in a row. You may recall that our blog won the voting contest among the 100 last year, the first year that the Journal put the Blawg 100 head-to-head in a round of voting.
This year, the voting is much more competitive and we currently stand in 8th place, behind such players as TaxGirl and IP Watchdog (who is way out in front). So we really need your support, particularly since our blog is sort of hidden in the obscure “Niche” category. It’s time for the corporate community to represent! If you value what you read all year long here, please repay us with 30 seconds of your time.
To help you navigate the ABA Journal’s voting framework, here are the steps you need to take:
a. If you voted last year:
1. You likely need to recover your password by simply inputting your email address. You will promptly receive an email with your password and screen name in it.
2. Once you have your password, you should login to their site
3. Once logged in, go to the “Niche” category and scroll down to TheCorporateCounsel.net Blog (it’s second from the bottom) and click on the “Vote” symbol to the left of that. Thanks!
b. If you didn’t vote last year:
1. Register to vote – it’s free (if you’re an ABA member, your ABA id/password won’t work for the ABA Journal’s site unfortunately as they are separate)
2. Once you get your password, you should login emailed to you
3. Once logged in, go to the “Niche” category and scroll down to TheCorporateCounsel.net Blog (it’s second from the bottom) and click on the “Vote” symbol to the left of that. Thanks!
If you’re having troubles, please shoot me an email and let me know and I can help you. Thanks for the support!
Nugget #3: Board Evaluations – Individual Evaluations are More Important in Light of Proxy Access
Recently, I started dribbling out some of the gems that Alan Dye and I shared a number of years ago during a series of “50 Nuggets in 50 Minutes” webcasts. Here is #3:
Board Evaluations – Individual evaluations are more important in light of shareholder access – The need for the nominating committee to evaluate incumbent directors has become clearer as the movement for shareholders to have a greater ability to nominate their own candidates grows [editor’s note: this was written in ’03; now that access is here, it truly apply]. For the nominating committee to evaluate incumbent directors, it needs information – and individual evaluations is one logical way to gather this information.
The latest surveys show that only 25% of public companies conduct individual evaluations. The most popular individual director evaluation method is the use of self-assessment questionnaires. Anyone who handles these evaluations should take care as this process can be quite political!
Poll: Who Should Play “Dave the Animal” in the Feature Movie?
A topic of interest among members is which characters will Dave and I play now that the Dodd-Frank Act has rendered “Billy Broc” Oxley and Dave “The Animal” Sarbanes obsolete (these characters were made infamous during these “The Sarbanes-Oxley Report” videos). So Dave and I seek your input into who we should be pretend to be now in this anonymous poll:
The Business Roundtable and the US Chamber of Commerce filed their Opening Brief in the case against the SEC over the proxy access rules. The Summary of the Argument in the Brief (found on page 28 of the 61 page brief) is as follows:
The Commission has forced public companies to include the director nominees of a select group of investors in company proxy materials on the basis of shifting, inconsistent, and unsubstantiated assertions that are the hallmark of an agency that has not reached a cohesive understanding of its action, nor “consider[ed] . . . important aspect[s] of the problem.” State Farm, 463 U.S. at 43. The Rules violate the Administrative Procedure Act, the Commission’s statutory duty to consider effects on efficiency, competition, and capital formation, and corporations’ First Amendment rights. They should be vacated.
1. In three recent decisions, this Court has admonished the Commission to “apprise itself . . . of the economic consequences of a proposed regulation.” See, 28 e.g., Chamber of Commerce, 412 F.3d at 144. The Commission failed that responsibility by repeatedly blaming state law for costs it was imposing. It neglected to provide any estimate for the campaign costs that record evidence showed would be the most costly element of the Rules and–after initially predicting that election contests under the Rules would occur 5 times as frequently as traditional proxy contests–shifted ground without explanation and asserted that the contests would occur 25 percent less frequently than proxy contests, even though a central premise of the Rules was that election contests would be initiated “more easily” than supposedly “prohibitively expensive” proxy contests.
2. The Commission also based its assessment of the Rules’ costs on willful ignorance toward the agenda and practices of activist institutional investors, and the conduct of directors and corporations. Commenters warned that special interest investors would use proxy access as leverage to obtain concessions from companies; as a “soap box” to voice disagreements with company policy; and to seek the election of candidates favorable to the special interests of labor unions or the political officials in charge of government pension funds. The Commission failed to even discuss the first two concerns, and its 126-page Adopting Release did not even mention union or government pension plans and their unique and divergent interests. The Commission compounded its error by suggesting that corporations might not oppose the election of access candidates, even though all record evidence was to the contrary, and although elsewhere the Commission relied on anticipated corporate opposition in positing that the Rules would function effectively.
3. The Commission claimed to be empowering shareholders, yet prohibited them from voting to bar or limit proxy access to avoid the costs the Commission admitted might occur. In similar fashion, the Commission abrogated state laws that it claimed to be effectuating.
4. The Commission applied its ill-founded rule to investment companies (e.g., mutual funds) despite conclusive evidence that the asserted need for proxy access at investment companies is even less, and that some of the costs would be higher.
5. By forcing public companies to carry campaign speech of certain activist investors, the Commission violated the First Amendment.
For all of these reasons, Rule 14a-11 and its associated amendments should be vacated.
Something I Never Thought I Would See
In the “things I never thought I would see” department, yesterday the Department of the Treasury put out a press release announcing the exercise of the overallotment option in the GM initial public offering. The press release notes that the exercise of the overallotment option brought $1.8 billion in additional net proceeds for the US taxpayers, bringing the grand total of “taxpayer proceeds” to $13.5 billion and cutting the US stake in the automaker to 33.3 percent. The press release goes on to detail the return on the GM investment and the total amount of TARP funds returned to taxpayers. With the overzealousness of this post-offering press release aside, for me it is great to see the success of GM’s IPO, and hopefully to see a return to business success for this great American institution. [I can’t help but love the new Chevrolet Camaro, having had a 1969 Camaro when I was 16.]
The SEC Staff on M&A
We have posted the transcript of the DealLawyers.com webcast: “The SEC Staff on M&A.”
A new white paper commissioned by the Council of Institutional Investors and prepared by The Corporate Library notes some improvement in pay practices at Wall Street firms since the financial crisis, but indicates that improvement is still needed in tying compensation to long-term value growth. Ted Allen notes in the RiskMetrics Governance Insight blog:
The Council of Institutional Investors (CII) released a new report today that concludes that Wall Street’s executive compensation practices have improved somewhat since the global financial crisis, but warns that major banks still are not tying pay to long-term gains in performance.
“While many banks have strengthened their pay practices, there’s still a long way to go,” Ann Yerger, CII’s executive director, said in a press release. “The report suggests they need to do more to make sure that executive compensation rewards performance over the long term.”
The report was prepared by written by Paul Hodgson, a senior research associate at the Corporate Library.
The report’s findings include:
– Total CEO compensation at major Wall Street institutions in 2003-2007 was two to three times the level of pay at other Fortune 50 companies during the same period. The differential was driven mainly by big dollops of time-restricted stock in Wall Street pay packages.
– Pay at these banks was structured to incentivize executives to deliver strong performance–over the short-term. But lavish cash bonuses, high absolute levels of pay, and excessive focus on short-term annual growth measures had damaging consequences for shareowners over the long-term.
– Compensation structures on Wall Street has improved since 2008, but the banks still are not tying compensation to long-term performance metrics.
The Case of the Forged Comment Letters
We have all observed the often annoying letter writing campaigns that are spawned by the SEC’s (or another agency’s) request for comments on rulemaking proposals where the people writing the letters don’t seem to have any idea what the rule proposal is actually about, but now it appears that a group has taken the letter writing campaign to a whole new level. This Bloomberg story discusses a recent situation where some comment letters submitted to the CFTC on one of its Dodd-Frank Act rulemaking were allegedly forged, and the CFTC has now referred the matter to the Justice Department.
This November-December issue of the Deal Lawyers print newsletter was just sent to the printer and includes articles on:
– The 2011 Outlook for Deals & Governance: Back to the Future
– “Clear and Simple”: SEC Proposes Say-on-Golden Parachute and Enhanced Disclosure Rules
– Delaware Supreme Court Upholds Net Operating Loss Poison Pill
– Top-Up Options: Looking Better and Better
– M&A Due Dilgence: The Effect of Restatements
If you’re not yet a subscriber, try a “Rest of ’10 for Free” no-risk trial to get a non-blurred version of this issue on a complimentary basis.
We have posted the December issue of our complimentary monthly email newsletter. Sign up today to receive it by simply inputting your email address!
PCAOB Approves a Budget Increase
While the talk in Washington is now focused on a pay freeze for federal workers, the PCAOB has announced its approval of a $204.4 million budget, which represents an 11.5% increase over the 2009 budget. The increase is accounted for in part by the new oversight responsibilities that the Dodd-Frank Act has conferred on the PCAOB, which will now have to oversee the audits of broker-dealers. The Board notes that “the majority of new expenses in the 2011 budget are increases in staffing, information technology and facilities. The need for these additional resources is largely the result of certain changes in the Board’s 2011 responsibilities and programs, including: (1) the commencement of a program to oversee broker-dealer audits, (2) enhanced requirements for performing and documenting PCAOB inspection work, and (3) a potential increased number of litigated enforcement proceedings.” In addition to the budget, the Board also approved a strategic plan for 2010-2014. The PCAOB budget now goes off to the SEC for approval.
Relief Extended for Credit Ratings in Asset-Backed Offerings
Last week, the Corp Fin Staff issued a new no-action letter to Ford Motor Credit and a related entity, extending the relief originally provided back in July following enactment of Section 939G of the Dodd-Frank Act, which specified that, effective July 22, 2010, Securities Act Rule 436(g) shall have no force or effect. The relief contemplated in the original letter was set to expire with respect to any registered offerings of asset-backed securities commencing with an initial bona fide offer on or after January 24, 2011. The Staff now states that “[p]ending further notice, the Division will not recommend enforcement action to the Commission if an asset-backed issuer as defined in Item 1101 of Regulation AB omits the ratings disclosure required by Item 1103(a)(9) and 1120 of Regulation AB from a prospectus that is part of a registration statement relating to an offering of asset-backed securities.”
On the same day last week, the Commission issued an order extending a temporary conditional exemption for NRSROs from the requirements of Exchange Act Rule 17g-5, which deals with conflicts of interest in connection with the issuance of credit ratings for structured finance products. The temporary conditional exemption will run through December 2, 2011. The Commission also continues to seek comments on this already effective rule.
Be sure to check out the Thanksgiving edition of the Dave & Marty radio show, where Marty and I discuss, among other fascinating topics, the federal securities law provisions for which we are most thankful. The other show topics include:
– Marty’s tips for tax opinions
– Things people say that irk us
– Favorite train songs
I also discuss the recent ISS Policy Update, including what to expect under the new “holistic” executive compensation analytical approach that will work off of a significantly condensed list of problematic pay practices.
If you have any topics that you would like to hear covered on the radio show (whether related to the securities laws or not), please send them my way.
COSO to Update the Internal Control Framework
As the internal control framework developed by the Committee of Sponsoring Organizations of the Treadway Commission nears its twentieth birthday, COSO has announced a project to review and update the framework. This update isn’t designed to alter the core principles of the framework, but rather will seek to “facilitate more robust discussion of internal control” through refinements to some of the concepts and guidance included in the framework. PwC is going to support the project, with an anticipated publication date in 2012.
FINRA IPO Abuse Rule Effective in May
As I noted in the blog last month, the SEC recently approved FINRA Rule 5131, which will regulate practices such as quid pro quo arrangements, “spinning,” inequitable penalty bids and the acceptance of market orders for new issue shares before commencement of secondary market trading. FINRA has now issued Regulatory Notice 10-60, which announces that the effective date of new Rule 5131 is May 27, 2011.
Without much fanfare, ISS recently released its final postseason report about the 2010 proxy season – which has a load of interesting statistics – which we have posted in our “Proxy Season” Practice Area.
DOJ Proclaims “New Era” of FCPA Enforcement
Here is news culled from this Morrison & Foerster memo: In a speech last week on the Foreign Corrupt Practices Act, the head of the U.S. Department of Justice’s Criminal Division proclaimed a “new era of FCPA enforcement.” Assistant Attorney General Lanny Breuer said enforcement of the FCPA is “stronger than it’s ever been — and getting stronger.” He described “historic” growth in FCPA actions and penalties ($1 billion+ in past 12 months and 35 individuals awaiting trial) and took on critics of the DOJ’s increasingly aggressive enforcement strategies. You “are right to be more concerned.” “We are here to stay.” Mr. Breuer concluded with concrete advice to companies “worried” about the new climate of “vigorous” enforcement, including encouraging companies to self-report.
According to this blog, you shouldn’t be surprised to see NBA star Ben Wallace in law school one day. That would be one mammoth lawyer!
Mailed: November-December Issue of The Corporate Executive
The November-December Issue of The Corporate Executive includes pieces on:
– Trap for the Unwary: Carrying Forward Contributions Under a Section 423 ESPP
– IRS Issues Private Letter Ruling on Division of Restricted Stock Pursuant to Divorce
– Purchase Date as Grant Date: Not a Bad Idea for Purchase Date FMV Only ESPPs
– The Box: Awards Contingent Upon Shareholder Approval of an Additional Allocation of Shares to the Plan
– Section 6039 Forms Expected Any Day Now
– Conducting Risk Assessments–A Step-by-Step Action Plan
– Examples of Effective Say-on-Pay Disclosures
As usual, Dominic Jones has been providing great coverage about how two companies recently experienced leaks on their IR web pages – where earnings information was released inadvertently ahead of the planned release time (see his coverage of Disney and NetApp). In addition to this coverage, Dominic blogged this piece yesterday: “IR website vendors explain how they prevent disclosure leaks.” It’s worth checking out to help ensure your company won’t experience this type of snafu.
Recently, I enjoyed reading Nell Minow’s piece about overcoming adversity and some reader responses like this one. Good piece to show my kids.
The Latest on IASB’s Loss Contingency Standard
Similar to the controversial FASB project to update its loss contingency standard (see this blog for the latest on that), the IASB is working on updating its own contingency standard. Here is news, courtesy of Tom White of WilmerHale: At its meeting on November 16, the IASB decided to modify its proposed standard for recognition of a loss contingency, IAS 37. Responding to comments – including the letter submitted by an ABA Committee – the IASB decided to modify the proposed recognition standard to reinstate the requirement that the preparer determine that it is more likely than not that a liability exists. The IASB also decided to provide more guidance about how to apply the standard to litigation contingencies. The IASB has also indicated that, in light of other priorities, it does not expect to return to IAS 37 until the 2nd half of 2011, at the earliest.
FASB Announces Post-Implementation Review Process
As Edith Orenstein blogs in FEI’s “Financial Reporting Blog,” the Financial Accounting Foundation (FAF) – which oversees the FASB – announced the launch of a post-implementation review process. This action follows up, in part, on a recommendation made by the SEC’s Committee on Improvements to Financial Reporting (CIFiR) aka the “Pozen Committee” – so named in honor of its chair, Bob Pozen. The recommendation was one of many recommendations aimed mainly at the SEC, but also at FASB and the PCAOB, in the final CIFiR report issued in August 2008. Edith also blogs about the appointment of the new FAF CEO (Terri Polley) and four new trustees.
On Friday, ISS issued its 2011 Policy Updates. Below is a description of them, courtesy of ISS:
Each year, ISS undertakes an extensive process to update the policies that inform its benchmark proxy voting recommendations. Our commitment is to make this process open and transparent, so that all members of the financial community–including our institutional investor clients and corporate issuers–understand the foundations of our benchmark policies and proxy voting recommendations. Our objective in this process is to address critical emerging corporate governance issues in a way that informs and enhances dialogue among investors, boards, and companies.
Our broad-based policy formulation process collects feedback from a diverse range of market participants through multiple channels: an annual Policy Survey of institutional investors and corporate issuers, roundtables with industry groups, and ongoing feedback during proxy season. ISS’ Global Research Policy Board, comprised of our global research heads and subject matter experts, uses this input in forming draft policy updates, the most significant of which are published for an open review and comment period. Policy changes will be effective for shareholder meetings on or after Feb. 1, 2011.
On Oct. 27, ISS released its key draft 2011 proxy voting policies to obtain feedback from institutional investors, corporate issuers, and industry constituents. The comment period ran through Nov. 11 and solicited feedback on 11 updates to ISS’ proxy voting policy guidelines in markets worldwide. The U.S. topics covered included “say on pay” frequency and “say on golden parachute” proposals, independent chair proposals from shareholders, director attendance, and authorized capital requests.
Independent Chair Proposals
The draft U.S. policy update regarding independent chair proposals included consideration of compelling company-specific circumstances that challenge the efficacy of appointing an independent chair. The comments suggested that a company’s disclosed rationale for maintaining a combined leadership role would not be a meaningful or useful input in determining a vote on these proposals in extenuating circumstances. These comments were consistent with the responses from the investor participants at an ISS policy roundtable in October. In fact, many institutional investors stated that ISS should not change its policy and should continue to evaluate these proposals on a case-by-case basis, taking into account whether the company has a robust counterbalancing governance structure (including an independent lead director with clearly delineated duties) and any problematic performance, governance, or management issues. Based on this feedback, ISS will not be changing its policy on independent chair proposals in 2011.
Management “Say on Pay” Votes
This is a new proxy item required by Dodd-Frank. The Dodd-Frank Act, in addition to requiring management “say on pay” (MSOP) votes on compensation, requires that each proxy for the first annual or other meeting of shareholders occurring after Jan. 21, 2011, also include an advisory vote to determine whether, going forward, the “say on pay” vote by shareholders should occur every one, two, or three years. In line with overall client feedback, ISS is adopting a new policy to recommend a vote FOR annual advisory votes on compensation, which provide the most consistent and clear communication channel for shareholder concerns about companies’ executive pay programs.
The MSOP is at its essence a communication vehicle, and communication is most useful when it is received in a consistent and timely manner. ISS supports an annual MSOP vote for many of the same reasons it supports annual director elections rather than a classified board structure: because this frequency provides the highest level of accountability and direct communication by enabling the MSOP vote to correspond to the majority of the information presented in the accompanying proxy statement for the applicable shareholders’ meeting. Having MSOP votes every two or three years, covering all actions occurring between the votes, would make it difficult to create the meaningful and coherent communication that the votes are intended to provide. Under triennial elections, for example, a company would not know whether the shareholder vote references the compensation year being discussed or a previous year, making it more difficult to understand the implications of the vote.
Vote on Golden Parachutes
This is a new proxy item required under the Dodd-Frank Act. ISS’ policy will be to recommend CASE-BY-CASE on proposals to approve the company’s “golden parachute” compensation, consistent with ISS’ policies on problematic pay practices related to severance packages. Features that may lead to an AGAINST recommendation include:
– Recently adopted or materially amended agreements that include excise tax gross-up provisions (since prior annual meeting);
– Recently adopted or materially amended agreements that include modified single triggers (since prior annual meeting);
– Single-trigger payments that will happen immediately upon a change in control, including cash payment and such items as the acceleration of performance-based equity despite the failure to achieve performance measures;
– Single-trigger vesting of equity based on a definition of change in control that requires only shareholder approval of the transaction (rather than consummation);
– Potentially excessive severance payments;
– Recent amendments or other changes that may make packages so attractive as to influence merger agreements that may not be in the best interests of shareholders; and
– In the case of a substantial gross-up from preexisting/grandfathered contract: the element that triggered the gross-up (i.e., option mega-grants at a low stock price, unusual or outsized payments in cash or equity made or negotiated prior to the merger); or the company’s assertion that a proposed transaction is conditioned on shareholder approval of the golden parachute advisory vote. ISS would view this as problematic from a corporate governance perspective.
In cases where the golden parachute vote is incorporated into a company’s MSOP vote, ISS will evaluate the “say on pay” proposal in accordance with these guidelines, which may give higher weight to that component of the overall evaluation. ISS’ policy on change-in-control packages has evolved over the past several years in response to client feedback and changes in common practice. ISS’ policy, informed by shareholder input, has focused particularly on severance packages that provide inappropriate windfalls and cover certain tax liabilities of executives.
Director Attendance
ISS’ current policy is to recommend a vote AGAINST or WITHHOLD from individual directors who attend less than 75 percent of the board and committee meetings without a valid excuse, such as illness, service to the nation, work on behalf of the company, or funeral obligations. If the company provides meaningful public or private disclosure explaining the director’s absences, ISS will evaluate the information on a CASE-BY-CASE basis, taking into account the following factors:
– Degree to which absences were due to an unavoidable conflict;
– Pattern of absenteeism; and
– Other extraordinary circumstances underlying the director’s absence.
The key policy change is to remove the private disclosure option for explaining absences; articulating the reasons that are acceptable; and clarifying the policy application when the company’s attendance disclosure does not conform with SEC requirements. In 2011, ISS will generally recommend a vote AGAINST or WITHHOLD from individual directors who attend less than 75 percent of board and applicable committee meetings (with the exception of new nominees). Acceptable reasons for director(s) absences are generally limited to the following:
– Medical issues/illness;
– Family emergencies; and
– If the director’s total service was three meetings or less and the director missed only one meeting.
These reasons for director(s) absences will only be considered by ISS if disclosed in the proxy or another SEC filing. If the disclosure is insufficient to determine whether a director attended at least 75 percent of board and committee meetings in aggregate, ISS will generally recommend a vote AGAINST or WITHHOLD from the director. The policy update aligns the application of the policy with best governance and public disclosure practices and is generally supported by the feedback received during ISS’ comment period. Directors who do not attend their board and committee meetings cannot be effective representatives of shareholders. Anyone who accepts a nomination to serve as director should be prepared to make attendance at meetings a top priority.
Customarily, boards set schedules for routine board and committee meetings at least a year in advance. Moreover, attending at least 75 percent of the meetings is not an unreasonable standard for directors to meet, as it still allows sufficient leeway for meetings missed due to legitimate reasons. Issuers are encouraged to proactively provide additional explanatory disclosure on poor attendance for the benefit of shareholders in the proxy or another SEC filing.
Shareholder Ability to Act by Written Consent
After a long hiatus, investors have resumed filing proposals requesting shareholders’ ability to act by written consent. However, the corporate governance landscape has changed tremendously. ISS acknowledges that a meaningful right to act by written consent is a fundamental right that enables shareholders to take action between annual meetings. However, the potential risk of abuse associated with the right to act by written consent such as bypassing procedural protections, particularly in a hostile situation, may outweigh its benefits to all shareholders in certain circumstances. Due to alternative mechanisms that have evolved for shareholders to express concern (e.g., a majority vote standard in board elections, the right to call a special meeting) and an evolving governance landscape, ISS will be making a more holistic consideration of a company’s overall governance practices and takeover defenses when evaluating these proposals.
ISS’ current policy is to generally recommend a vote FOR management and shareholder proposals that provide investors with the ability to act by written consent, taking into account the following factors:
– Shareholders’ current right to act by written consent;
– Consent threshold;
– The inclusion of exclusionary or prohibitive language;
– Investor ownership structure; and
– Shareholder support of, and management’s response to, previous shareholder proposals.
Based on feedback received from both issuers and institutional investors from ISS’ policy roundtable in October, ISS will consider, as an additional factor, the company’s overall governance practices and takeover defenses (with emphasis on shareholders’ ability to call special meetings) in evaluating these proposals. In 2011, ISS will continue to generally recommend a vote FOR management and shareholder proposals seeking to provide shareholders with the ability to act by written consent, after taking into account the factors mentioned above. However, ISS will recommend on a CASE-BY-CASE basis (and may recommend AGAINST) if, in addition to the considerations above, the company has the following provisions:
– An unfettered right for shareholders to call special meetings at a 10 percent threshold;
– A majority vote standard in uncontested director elections;
– No non-shareholder approved pill; and
– An annually elected board.
Gearing Up for Say-on-Pay: What Clients Are Asking Now
We have posted the transcript for our recent CompensationStandards.com webcast: “Gearing Up for Say-on-Pay: What Clients Are Asking Now.” Don’t forget that those that renew for 2011 now – all 2010 memberships expire at the end of the year – will gain access to these two upcoming say-on-pay webcasts:
Can a man love both Bethany McLean and his wife at the same time? I’ve watched several interviews now featuring Bethany and Joe Nocera (the NY Times’ columnist who spoke so well at our executive pay conference last year) and both of them clearly are the voice of reason. Here is their interview on Charlie Rose – and here is their interview from “The Daily Show.”
For a random act of culture, check out this video of a flash mob doing an oratorio at Macy’s.
Matrixx Initiatives v. Siracusano: The Upcoming SCOTUS “Materiality” Case
Many of us are eagerly awaiting the Supreme Court’s decision in Matrixx Initiatives v. Siracusano as it will be the first SCOTUS decision on “materiality” since Basic v. Levinson in 1988 and TSC Industries v. Northway in 1976. This article explains the case nicely.
With oral argument recently set for January 10th, the briefs – including numerous amicus briefs – have been submitted – and are now available. Among others, the SEC and groups of professors have weighed in on this important case.
SEC’s RiskFin Director Hu: Back to Academics
As I tweeted yesterday, I was not surprised to hear that the SEC’s RiskFin Director Henry Hu was returning to his post at the University of Texas after little more a year on the job. I would imagine that most academics would have trouble shifting gears from theory in teaching to the realities of regulation – and my guess is that this dramatic change played a role in Henry’s impending departure. It will be interesting to see who the SEC taps as the next Director given this development…
