Monthly Archives: January 2026

Compensation Season 2026

Posted by Jeannemarie O'Brien, Michael J. Schobel, and Erica E. Aho, Wachtell, Lipton, Rosen & Katz, on
Saturday, January 31, 2026
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Jeannemarie O’Brien, Michael J. Schobel, and Erica E. Aho are Partners at Wachtell, Lipton, Rosen & Katz. This post is based on a Wachtell memorandum by Ms. O’Brien, Mr. Schobel, Ms. Aho, and Alison E. Beskin.

With 2025’s deal momentum expected to continue into 2026, attracting and retaining key talent remains critical amidst economic and political uncertainty.  Macroeconomic indicators are mixed, with stable economic growth and easing interest rates coupled with above-target inflation and a slowing labor market.  At the same time, the new U.S. presidential administration has ushered in large-scale policy shifts.  Keeping executives and employees engaged is essential to navigating the current landscape.  We review below some of the legal updates and compensation trends that may shape compensation decisions in 2026 and beyond.

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Weekly Roundup: January 23-29, 2026

Posted by the Harvard Law School Forum on Corporate Governance, on
Friday, January 30, 2026

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This roundup contains a collection of the posts published on the Forum during the week of January 22-28, 2026

Letter in Response to SEC Changes to the Rule 14a-8 Shareholder Proposal Process

Posted by Jen Sisson and Severine Neervoort, ICGN, on Friday, January 23, 2026
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2025 ESG Wrap-Up and 2026 Outlook

Posted by Simon Toms, Kate Jackson-McGill KC and Justin Lau, Skadden, Arps, Slate, Meagher & Flom LLP, on Saturday, January 24, 2026
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26 Trends Affecting Capital Markets in 2026

Posted by Anna Pinedo, Mayer Brown LLP, on Sunday, January 25, 2026
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When Does an Officer’s Sexual Harassment of Employees Constitute a Fiduciary Breach?

Posted by Gail Weinstein, Philip Richter, and Steven Epstein, Fried Frank, on Monday, January 26, 2026
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Rulemaking Petition Pursuant to the Holding Foreign Insiders Accountable Act (HFIAA)

Posted by Robert J. Jackson, Jr (New York University), Bradford Levy (University of Chicago), and Daniel J. Taylor (University of Pennsylvania), on Monday, January 26, 2026
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Pulse on Pay: 12 Years of CEO Pay

Posted by Margaret Hylas, Leah Sine, and Michelle Wu, Semler Brossy, on Monday, January 26, 2026
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The Debate on Performance Shares—Who Has It Right

Posted by Ani Huang and Charles G. Tharp, CHRO Association, on Tuesday, January 27, 2026
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2025 Review of Shareholder Activism

Posted by Jim Rossman, Ryan Ferguson, and Abraham Axler, Barclays, on Tuesday, January 27, 2026
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Controllers Unbound

Posted by Lucian Bebchuk (Harvard Law School) and Kobi Kastiel (Tel Aviv University), on Tuesday, January 27, 2026
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Statement Commenting on the SEC’s Withdrawal from the No Action Process

Posted by Josh Zinner, Timothy Smith, and Beth-ann Roth, ICCR & Shareholder Rights Group, on Wednesday, January 28, 2026
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Law School Faculty Who Publish in Top Finance Journals

Posted by Michael Simkovic (University of Southern California), on Wednesday, January 28, 2026
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Remarks by Commissioner Uyeda on Modernizing Securities Regulation

Posted by Mark T. Uyeda, U.S. Securities and Exchange Commission, on Wednesday, January 28, 2026
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2025 M&A/PE Key Developments

Posted by Gail Weinstein, Philip Richter, and Steven Epstein, Fried Frank, on Thursday, January 29, 2026
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Antitrust, Anti-Activism

Posted by Frank Partnoy (UC Berkeley), on Thursday, January 29, 2026
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Is “DExit” real?

Posted by Mallory Tosch Hoggatt, Daniel Litowitz, Samantha Peppers, A&O Shearman, on Thursday, January 29, 2026
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Key Considerations for the 2026 Proxy Season

Posted by Simone Hicks, Eric Jurgens, and Paul Rodel, Debevoise & Plimpton LLP, on
Friday, January 30, 2026
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Simone Hicks, Eric Jurgens, and Paul Rodel are Partners at Debevoise & Plimpton LLP. This post is based on a Debevoise memorandum by Ms. Hicks, Mr. Jurgens, Mr. Rodel, Benjamin Pedersen, John Jacob, and Alison Buckley Serfass.

Key Takeaways

  • Prepare for a less predictable 2026 proxy season. Proxy advisor policy changes, evolving Rule 14a-8 processes, and shifts in investor stewardship are likely to affect shareholder engagement, voting dynamics and disclosure expectations.
  • Review shareholder proposal and engagement strategies in light of the Securities and Exchange Commission’s (“SEC”) decision not to substantively respond to most Rule 14a-8 no-action requests and the potential litigation, reputational, and activism risks associated with excluding proposals without no-action relief.
  • Revisit proxy disclosures with a “2026 lens.” Refresh CD&A narratives (including non-GAAP metrics and security-related perquisites), insider trading policy and governance disclosures to ensure clear and up-to-date disclosures that align with evolving investor and proxy advisor expectations.

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Is “DExit” real?

Posted by Mallory Tosch Hoggatt, Daniel Litowitz, Samantha Peppers, A&O Shearman, on
Thursday, January 29, 2026
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Mallory Tosch Hoggatt and Daniel Litowitz are Partners, and Samantha Peppers is an Associate at A&O Shearman. This post is based on an A&O Shearman memorandum by Ms. Hoggatt, Mr. Litowitz, Ms. Peppers, Sean Skiffington, and Billy Marsh, and is part of the Delaware law series; links to other posts in the series are available here.

INTRODUCTION

For more than a century, Delaware has reigned as the favored domicile for U.S. companies, celebrated for its deep body of corporate law and its specialized Court of Chancery that resolves corporate disputes between sophisticated parties and brings some element of predictability to the application of its corporate law. In recent years, however, a series of high-profile decisions from the Court of Chancery have coincided with (and some might say caused) notable re-domiciliations out of Delaware by Tesla, SpaceX, Dropbox, Tripadvisor, Andreessen Horowitz, and others. Talk of a flight from Delaware, or a “DExit,” followed. Although the absolute number of exits remains modest against Delaware’s vast roster of companies, the directional shift is real and underscores that domicile is no longer a one-size-fits-all decision.

At the same time, two rivals are ascendant. Texas, having launched its statewide Business Court in September 2024, is refining its Business Organizations Code (TBOC) to make it more attractive to companies and laying the groundwork for a Texas-based stock exchange. Nevada, long marketed as management-friendly, has expanded statutory protections for directors and officers and is moving toward a single, statewide business court.

Today, the choice of domicile influences everything from deal timing to litigation exposure and governance risk, and many companies are assessing whether Delaware—which for years was always a given—is the best place to incorporate when going public and some are even contemplating reincorporating to a new state.

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Antitrust, Anti-Activism

Posted by Frank Partnoy (UC Berkeley), on
Thursday, January 29, 2026

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Frank Partnoy is the Adrian A. Kragen Professor of Law at the University of California, Berkeley School of Law. This post is based on a recent paper by Professor Partnoy, Bobby Bishop, Associate Professor at Duke Law School, Slava Fos, Professor at Boston College Carroll School of Management, and Wei Jiang, Charles Howard Candler Professor of Finance at Emory University Goizueta Business School.

During the previous two decades, the four of us have published many studies on shareholder activism and mergers and acquisitions at leading academic outlets. But until this paper, Antitrust, Anti-Activism, neither we nor anyone else had uncovered the intricate interaction between antitrust regulation and shareholder activism.

There have been numerous examples, as recently as 2024 and 2025, of both regulators and activists responding to the antitrust disclosure thresholds set in the Hart-Scott-Rodino (HSR) Act, including both federal civil penalty settlements from regulators and high-profile activist decisions that were impacted by HSR thresholds. We had heard over the years from mostly anecdotal sources that these HSR thresholds have real bite, and recently we decided to study whether they do, using a comprehensive empirical study. Our findings surprised us in their clarity and significance.

Our empirical strategy is based on the fact that the dollar-based HSR disclosure thresholds correspond to an increasingly smaller percentage of shares outstanding as a firm’s market capitalization increases. As a result, the HSR thresholds are lower than the percentage-based 5% Section 13(d) disclosure threshold for some mid-cap firms and much lower than 5% for large-cap firms. READ MORE »

2025 M&A/PE Key Developments

Posted by Gail Weinstein, Philip Richter, and Steven Epstein, Fried Frank, on
Thursday, January 29, 2026
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Gail Weinstein is a Senior Counsel, Philip Richter is a Partner, and Steven Epstein is the Managing Partner at Fried, Frank, Harris, Shriver & Jacobson LLP. This post is based on a Fried Frank memorandum by Ms. Weinstein, Mr. Richter, Mr. Epstein, Steven J. Steinman, Randi Lally, and Colum J. Weiden.

Please note that this article does not cover developments since the end of 2025.

Below, we discuss key 2025 developments in each of the following areas:

AI

AI fervor is ubiquitous—it has been a key driver of M&A activity this year, as almost all companies in almost all industries now view it as imperative to have these capabilities. The surge in overall M&A activity seen in the third quarter this year was led by large deals (those valued at $5 billion or more), and about one quarter of these large deals had an AI theme, relating to building in-house capabilities, enhancing existing product offerings, acquiring data center products, or responding to AI-related power demands. (Outside M&A, there were also large “acquihires,” where companies acquired AI experts, licensed intellectual property, or invested in minority stakes to obtain AI capabilities.) In addition, AI is increasingly being used as a support tool throughout the life cycle of the M&A process—to locate deals, assess risk, analyze historical deal data, automate due diligence and disclosure schedules, manage the regulatory approval process, produce documents, and facilitate post-closing integration.

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Remarks by Commissioner Uyeda on Modernizing Securities Regulation

Posted by Mark T. Uyeda, U.S. Securities and Exchange Commission, on
Wednesday, January 28, 2026
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Mark T. Uyeda is a Commissioner of the U.S. Securities and Exchange Commission. This post is based on his recent remarks. The views expressed in this post are those of Commissioner Uyeda and do not necessarily reflect those of the Securities and Exchange Commission or its staff.

Enhancing the Public Company Disclosure Framework

Thank you, Dave [Lynn], for that kind introduction.[1] I appreciate the opportunity to deliver the Alan B. Levenson Keynote Address, named in honor of the former director of the Division of Corporation Finance (Corp Fin). Alan started his service at the Commission during the tenure of Chairman Edward “Ned” Gadsby, who was appointed by President Eisenhower.[2] During his service, the Commission and its staff operated in a very different manner. It is hard to imagine a Corp Fin staff member today questioning a notorious figure such as former Teamsters president Jimmy Hoffa in a public hearing—but that is what Alan was able to do.

For lawyers involved in capital markets transactions, the annual Securities Regulation Institute organized by the Northwestern School of Law has become an important gathering. For those of us at the SEC, it represents an opportunity to engage with experienced securities law practitioners who can provide valuable feedback needed to develop sound regulatory policies. This is especially true as we revisit our rulebook to promote its effectiveness and reduce compliance burdens where regulatory obligations do not provide commensurate benefits for investors or our markets.

The obligation to weigh burdens versus benefits is not a personal preference or philosophy of mine. In fact, it is a legislative mandate. Congress tasked the SEC with this exact objective when it passed the National Securities Markets Improvement Act of 1996 (NSMIA).[3] NSMIA directs the Commission to consider whether an action will promote capital formation “whenever we are required to consider the impact of an action upon investor protection pursuant to a rulemaking function.”[4] It is unfortunate that the prior administration downplayed this directive, given the many misguided rulemakings that were proposed and adopted during that period.

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Law School Faculty Who Publish in Top Finance Journals

Posted by Michael Simkovic (University of Southern California), on
Wednesday, January 28, 2026
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Michael Simkovic is Professor of Law and Accounting at the USC Gould School of Law. This is based on his recent report.

Legal academia is full of brilliant scholars doing important work. But a small group of law professors have done something rather unusual: getting past the notoriously demanding referees at the Journal of Finance, Journal of Financial Economics, and Review of Financial Studies—the most selective peer-reviewed finance journals in the world.

These three journals sit at the pinnacle of financial economics. They reject roughly 94% of submissions. The review process is grueling, often requiring multiple rounds of revision over several years. Success requires not just a good idea, but the technical chops to execute rigorous empirical or theoretical work that satisfies finance PhDs who’ve spent their careers in a mathematically demanding field—one that has produced Nobel laureates such as Eugene Fama, Robert Shiller, and Robert Merton.

For law professors—who typically face different training, different incentive structures, and different scholarly conversations—breaking through is a genuine accomplishment. It represents a bridge between two disciplines that don’t always speak the same language.

The first law professor to publish in a top-3 finance journal appears to be Harvard’s Mark Roe, who published seminal work on corporate ownership in the Journal of Financial Economics in 1990. The most published is Lucian Bebchuk (also at Harvard), with ten publications across these journals. But faculty at a growing number of institutions have shown they can compete at the same level—Berkeley, Columbia, Virginia, NYU, Northwestern, Yale, Stanford, Chicago, and others have all placed work in these journals. READ MORE »

Statement Commenting on the SEC’s Withdrawal from the No Action Process

Posted by Josh Zinner, Timothy Smith, and Beth-ann Roth, ICCR & Shareholder Rights Group, on
Wednesday, January 28, 2026
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Josh Zinner is the CEO, Timothy Smith is the Senior Policy Advisor, and Beth-ann Roth is the General Counsel at the Interfaith Center on Corporate Responsibility (ICCR). This post is based on a statement released by the ICCR and the Shareholder Rights Group.

The recent announcement by the SECʼs Division of Corporation Finance that its staff will not, during the 2026 proxy season, “… respond to no-action requests related to any basis for exclusion other than 14a-8(i)(1)” leaves both companies and investors in uncertain, uncharted waters. The lack of staff input deprives companies and proponents of an orderly and time-honored process.

We are concerned about the Division’s new approach and believe that companies would be unwise to rely on it as a basis to unilaterally decide to omit a resolution without considering further input from proponents.

For decades, shareholder proposals have been a key mechanism for investors to engage with the companies they own, and they have become an indispensable part of corporate governance. Shareholder engagement has encouraged many companies to adopt governance policies that are now widely adopted as best practices and recognized as important to long-term value creation. And resolutions relating to environmental and social impacts have led to important changes such as widespread adoption of human rights due diligence, corporate codes of conduct, and better management of climate risks.

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Controllers Unbound

Posted by Lucian Bebchuk (Harvard Law School) and Kobi Kastiel (Tel Aviv University), on
Tuesday, January 27, 2026
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Lucian Bebchuk is the James Barr Ames Professor of Law, Economics, and Finance and Director of the Program on Corporate Governance at Harvard Law School, and Kobi Kastiel is Professor of Law at Tel Aviv University. This post is based on their recent paper. Related research from the Program on Corporate Governance includes Independent Directors and Controlling Shareholders by Lucian Bebchuk and Assaf Hamdani; How to Control Controller Conflicts by Lucian Bebchuk and Kobi Kastiel; The Untenable Case for Perpetual Dual-Class Stock by Lucian Bebchuk and Kobi Kastiel; and The Perils of Small-Minority Controllers by Lucian Bebchuk and Kobi Kastiel.

We just placed on SSRN our study Controllers Unbound. This post is part of a series of posts, based on this study, about the expected dire consequences of the recent relaxing of constraints on controlling shareholders.

Delaware’s recent SB21 legislation substantially weakened the constraints on controllers of public companies. Weak constraints exist in other states—notably Texas and Nevada—and Delaware’s legislation appears intended, at least in part, to induce companies to avoid reincorporating to those jurisdictions. These weaker constraints, our study concludes, should be expected to produce large and detrimental effects for public investors and the broader economy.

Even among those who have expressed concern about SB 21 and the loosening of controller constraints, we believe, there is substantial underestimation of the expected harm. This underestimation, we contend, is also prevalent among institutional investors. We believe it is crucial for all those interested in protecting public investors and ensuring the efficient operation of corporate America to fully understand the looming risks, and we seek to contribute to that understanding. We hope our work will help educate investors and market participants about the significant dark clouds gathering over the U.S. capital markets.

The analysis of our study has several components, which we outline in turn below.

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