Fortune magazine has an article about Lucian Bebchuk in its current issue. The article, by Geoffrey Colvin, Fortune’s senior editor at large, discusses both Bebchuk’s bylaws initiative and his academic work. Below is the profile:
A Corporate Governance Gadfly Irks CEOs: Lucian Bebchuk’s Shareholder Initiatives are Shaking Corporations.
by Geoff Colvin
He insists he isn’t an activist. Plenty of America’s CEOs must hope he means it. “I’m mainly a kind of ivory tower academic,” says professor Lucian Bebchuk of Harvard Law School, and that he surely is – the only person I know of with four graduate degrees from Harvard (master’s and doctoral degrees in law and economics).
But as director of the school’s Program on Corporate Governance he has also become America’s most influential critic of CEO pay–to the deep annoyance of many CEOs, who say privately they wish he’d just be quiet. So now that he’s behaving like a shareholder activist as well for the second proxy season in a row, the mere suspicion that it could be a new career cannot be comforting.
Bebchuk is best known for careful research that skewers the way CEOs get paid. From the bosses’ perspective he has been distressingly energetic, not only writing a book (Pay Without Performance) but also delivering lectures, contributing op-ed pieces, conducting seminars and testifying before Congress.
Then, starting last year, he got into the game directly and changed it. Based on a particularly astute reading of corporation law that’s too complicated to describe here, he filed a proposal with CA (formerly Computer Associates), to be voted on by shareholders at the annual meeting, that would change CA’s bylaws regarding the so-called poison-pill takeover defense. Bebchuk and many others see that mechanism as a management entrenchment device that hurts shareholders. His proposed bylaw change would let CA adopt a pill, but only by unanimous vote of the board, which would have to reaffirm the vote unanimously every year.
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