Monthly Archives: July 2026

The Say-on-Pay Vote Is In. What Did It Actually Say?

Posted by Serdar Sikca and Kenneth Sparling, FW Cook, on
Monday, July 6, 2026
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Serdar Sikca is a Principal and Kenneth Sparling is a Managing Director at FW Cook. This post is based on their FW Cook memorandum.

By late June, the Say-on-Pay (“SOP”) vote has usually moved from the proxy calendar into the Compensation Committee’s rearview mirror. The proxy advisor reports have been circulated, and investor relations or the corporate secretary may already know which large shareholders were supportive and which were not.

This is when the approval percentage can start to crowd out the underlying signals.

As of June 1, average SOP support across S&P 500 companies was 91%, with only three companies falling below 50%. Most companies will be interpreting results that look broadly supportive at first glance.

The SOP vote records how shareholders reacted to the pay decisions and rationale presented in the proxy, yet it does not explain why. The work after the vote is to determine whether the result reveals anything the Committee should understand before fall engagement begins and compensation design decisions are finalized.

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Delaware’s First Read on the DGCL Section 144 Safe Harbor

Posted by Andre G. Bouchard, Michael Darby and Carmen X. Lu, Paul, Weiss, Rifkind, Wharton & Garrison LLP, on
Monday, July 6, 2026
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Andre G. Bouchard, Michael Darby, and Carmen X. Lu are Partners at Paul, Weiss, Rifkind, Wharton & Garrison LLP. This post is based on a Paul Weiss memorandum by Mr. Bouchard, Mr. Darby, Ms. Lu, Frances F. Mi, Laura C. Turano, and Cara Fay, and is part of the Delaware Law Series and the Controlling Shareholder Series; links to other posts in the Delaware Law Series are available here; links to other posts in the Controlling Shareholder Series are available here.

Recently in Ayers v. Foley, the Delaware Court of Chancery issued an opinion (by Vice Chancellor Will) interpreting for the first time certain provisions in the 2025 amendments to Section 144 of the Delaware General Corporation Law (“DGCL”), the landmark statutory reforms that provide safe harbor protections for certain conflicted transactions. The practical takeaway of Ayers is that Section 144 has raised the bar materially for rebutting the presumption of director independence at the pleading stage for publicly listed corporations when the board has determined that a director satisfies the exchange’s independence requirements because of the statute’s “substantial and particularized facts” pleading requirement. Significantly, the court reached this conclusion in the context of determining the issue of demand futility, reasoning that the heightened pleading standard in Section 144 is not confined to the safe harbors in Section 144 and was intended to apply broadly to other contexts as well. Ayers also reaffirms that when directors approve their own compensation, they are necessarily interested and their actions continue to be subject to entire fairness review.

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Strategy’s Bitcoin Treasury Model: Corporate Omphaloskepsis, Polypharmacy of Risk, and Shareholder and Societal Welfare

Posted by Henry Hu (University of Texas Law School), on
Sunday, July 5, 2026
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Henry T. C. Hu is the Allan Shivers Chair in the Law of Banking and Finance at the University of Texas Law School. This paper is based on his recent article, forthcoming in the Journal of Corporation Law.

Strategy Inc (MSTR), formerly MicroStrategy Incorporated, functions differently from other public companies. At its core, the firm produces no goods or services, has no operating cash flow, and does not compete with other companies. Yet, by early 2025, its share price had risen 27-fold since it began its transformation to a new corporate model less than five years earlier. Its stock’s 110% annualized return was multiples higher than any S&P 500 stock. In a Financial Times film released that spring, Michael Saylor, its chairman and co-founder, stated that the firm’s stock market capitalization of $100 billion “can grow” 100-fold to $10 trillion by 2045—i.e., the current combined market capitalization of Amazon, Apple, and Microsoft.

MSTR styles itself as the first and largest “bitcoin treasury company” (BTCo). Corporations worldwide began imitating its BTCo model. With 4% of all outstanding bitcoins, MSTR is the largest known institutional holder. In 2025 it issued more equity capital than any other U.S. company.

This Article is the first academic work on the law and economics of the MSTR model. It introduces two concepts: “corporate omphaloskepsis,” which helps capture the model’s ends and means, and “polypharmacy of financial risk,” which frames some key consequences for shareholders. MSTR’s path to shareholder wealth maximization departs from longstanding financial and legal understandings. For ordinary public companies, the animating engine of shareholder wealth management rests on the production of goods and services. Perhaps the foremost task of management is to produce new or better goods and services or ones at lower cost than competitors. The overarching pecuniary corporate end is to maximize the fundamental value of its shares, relying on a convergence of share price to fundamental value to maximize shareholder wealth. READ MORE »

Other People’s Votes

Posted by Edwin Hu (University of Virginia), Nadya Malenko (Boston College), and Jonathon Zytnick (Georgetown University), on
Saturday, July 4, 2026
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Edwin Hu is an Associate Professor of Law at the University of Virginia School of Law, Nadya Malenko is a Professor of Finance and Wargo Family Faculty Fellow at the Boston College Carroll School of Management, and Jonathon Zytnick is an Associate Professor of Law at the Georgetown University Law Center. This post is based on their recent article, forthcoming in the Georgetown Law Journal.

There has never been more interest in restraining proxy advisors. President Trump has issued an executive order devoted to “[p]rotecting American [i]nvestors” from them. Elon Musk has called them “corporate terrorists.” Two House committees are investigating them. The SEC has adopted two sweeping, and entirely conflicting, regulatory regimes, now subject to clashing rulings from three circuit courts. Texas has passed a law that could expose proxy advisors to a wave of lawsuits, and at least thirteen other states have proposed similar legislation.

Yet many of the proposals advanced in this debate rest on flawed economic foundations. In a new article, Other People’s Votes, we offer an economic roadmap for understanding proxy advice and its role in shareholder voting, in the hope that policymakers will target legitimate sources of concern rather than continue to propose counterproductive fixes.

Institutional investors vote on consequential questions: who sits on the board, whether executive pay is excessive, whether a merger should proceed. They must do so across tens of thousands of proposals each season. But the incentive structure of shareholder voting systematically discourages informed participation. An investor who becomes informed bears concentrated costs, while the benefits of any individual vote are diffuse, probabilistic, and shared pro rata with everyone else. The predictable result is free-riding and underinvestment in monitoring.

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Where Stewardship is Heading: Survey Findings on Outsourcing and Oversight

Posted by Rickard Nilsson, Glass, Lewis & Co., on
Friday, July 3, 2026
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Rickard Nilsson is Director of Stewardship at Glass, Lewis & Co. This post is based on his Glass Lewis memorandum.

Key Takeaways

  • Respondents to Glass Lewis’ Stewardship Survey who use an external stewardship provider say they mostly do so as “capacity multipliers,” leveraging external resources and expertise to pursue common goals.
  • Challenges faced by respondents overseeing outsourced engagement revolve around data-related issues, particularly collecting information from managers and normalizing the data and formats.
  • When asked if ESG or anti-ESG positions influenced their stewardship priorities, respondents said the issue has not led to wholesale reprioritization, but is of marginal influence.

Communicating how investors structure, resource, and execute stewardship in an increasingly complex operating environment was the primary aim of this year’s Investment Stewardship Survey Report.1 This article summarizes some of the more forward-looking sentiments of respondents, specifically on their use of engagement-providers, their oversight of outsourced stewardship, and the implications of a diverging market landscape.

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Weekly Roundup: June 26-July 2, 2026

Posted by the Harvard Law School Forum on Corporate Governance, on
Friday, July 3, 2026

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This roundup contains a collection of the posts published on the Forum during the week of June 26-July 2, 2026

Shareholder Activism Approaching the 2026 Midpoint: Trends, Lessons, and What to Expect for the Rest of the Season

Posted by Sebastian Alsheimer, J.T. Ho, and Paul J. Shim, Cleary Gottlieb Steen & Hamilton LLP, on Friday, June 26, 2026
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AI in Incentive Plans: Opportunity, Risk, and the Role of the Compensation Committee

Posted by Pat Haggerty, Pearl Meyer & Partners, LLC, on Saturday, June 27, 2026
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Delaware Court of Chancery Interprets New Section 144 and Applies Heightened Presumption of Director Independence

Posted by Amy Simmerman, Brad Sorrels, and Jordan Cramer, Wilson Sonsini Goodrich & Rosati, on Sunday, June 28, 2026
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Delaware Court of Chancery Dismisses Stockholder Claims as Derivative, Unripe, and Untimely

Posted by Robin Wechkin and Madison Ferraro, Sidley Austin LLP, on Monday, June 29, 2026
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Opting Out of Court? Reputation and Informal Norms in Private Equity

Posted by Kobi Kastiel (Tel Aviv University) and Yaron Nili (Duke University), on Monday, June 29, 2026
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U.S. Proxy Season: Say-on-Pay, One-Time Awards, and Equity Plan Trends

Posted by Subodh Mishra, ISS STOXX, on Monday, June 29, 2026
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First Court of Chancery Decision Interpreting New DGCL Amendments Provides Greater Certainty for Boards and M&A

Posted by Rick Horvath, Eric Siegel, and Molly Wang, Dechert LLP, on Tuesday, June 30, 2026
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The Effective Board: A Guide to Drive Board Performance

Posted by Lee Henderson and Jamie Smith, EY, on Tuesday, June 30, 2026
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Court of Chancery Imposes Sanctions for Spoliation of Signal Messages

Posted by Mallory Tosch Hoggatt, Alan Goudiss, Jeffrey Hoschander, A&O Shearman, on Wednesday, July 1, 2026
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Audit Committee Considerations for SEC’s Proposal on Semiannual Reporting

Posted by Kathy Nieland, Tracey-Lee Brown, and Gregory Johnson, PricewaterhouseCoopers LLP, on Wednesday, July 1, 2026
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Post-Doctoral and Doctoral Corporate Governance Fellowships for Individuals with Legal Training

Posted by Harvard Law School Forum on Corporate Governance, on Wednesday, July 1, 2026
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Short-Term Incentive Metrics: Increasing Metric Complexity and a Pay-for-Performance Disconnect

Posted by Subodh Mishra, ISS STOXX, on Thursday, July 2, 2026
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Remarks by Chair Atkins on the SEC’s Regulatory Priorities

Posted by Paul Atkins, U.S. Securities and Exchange Commission, on Thursday, July 2, 2026
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Remarks by Chair Atkins on the SEC’s Regulatory Priorities

Posted by Paul Atkins, U.S. Securities and Exchange Commission, on
Thursday, July 2, 2026
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Paul S. Atkins is the Chairman of the U.S. Securities and Exchange Commission. This post is based on his recent remarks. The views expressed in the post are those of Chairman Atkins and do not necessarily reflect those of the Securities and Exchange Commission or its staff.

Good afternoon, ladies and gentlemen. And thank you, Barbara [Van Allen], for your generous introduction. Before I offer a few reflections, I must note the standard disclaimer that the views I express here today are my own as Chairman and do not necessarily reflect those of the SEC as an institution or of my fellow Commissioners.

First, let me begin by expressing what a profound privilege it is to speak to the Economic Club of New York. Of course, this occasion is rendered especially meaningful—and even, serendipitously, a greater honor—by its timing, as we stand mere days away from the 250th anniversary of our Republic. Such a momentous occasion calls not only for celebration, but also for reflection on the great deeds of the past, and a renewed resolve to confirm that the spirit of 1776 remains our animating force today.

So, I do not take lightly the moment in which I stand before you, nor the duty ahead of me to adequately honor our extraordinary Nation, its courageous pioneers, and its storied history—a duty, yes, but for me, really a delight.

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Short-Term Incentive Metrics: Increasing Metric Complexity and a Pay-for-Performance Disconnect

Posted by Subodh Mishra, ISS STOXX, on
Thursday, July 2, 2026
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Subodh Mishra is the Global Head of Communications at ISS STOXX. This post is based on an ISS-Corporate memorandum by Will Harrington and Sean Reilly, Compensation and Governance Advisory, at ISS-Corporate.

Key takeaway

  • Increases in the number of metrics used in short-term CEO incentive plans correspond with a
    notable increase in payout levels across the S&P 1500
  • Above-median payouts do not clearly correspond to above-median performance, as measured by annual TSR
  • The Pandemic inspired a shift in metric utilization with a higher number of short-term incentive
    plans utilizing a greater number of incentive metrics after 2020. The level has remained elevated
    even after the impact of the Pandemic decreased
  • Use of a diversified set of short-term incentive metrics raises key questions for compensation
    committees over executive retention and performance incentivization
  • Use of non-financial metrics, often difficult for those outside a company to assess, has also
    increased since the Pandemic

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Post-Doctoral and Doctoral Corporate Governance Fellowships for Individuals with Legal Training

Posted by Harvard Law School Forum on Corporate Governance, on
Wednesday, July 1, 2026

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The Program on Corporate Governance at Harvard Law School (HLS) is pleased to announce that it is seeking applications from highly qualified candidates who are interested in working with the Program as Post-Doctoral or Doctoral Corporate Governance Fellows.

Candidates should have a law degree from a law school in the United States or abroad. Candidates still pursuing a doctoral degree are eligible so long as they will have completed their program’s coursework requirements by the time they begin their fellowship period.

During the term of their appointment, Fellows will be in residence at HLS. They will be required to devote part of their time to work on research tasks assigned by the Program, depending on their skills, interests, and Program needs, but will be able to spend significant time on projects initiated by them. The position will provide a competitive fellowship salary and Harvard University benefits.

Applicants should have an interest in corporate governance and in academic or policy research in this field. Former Fellows of the Program currently teach in many leading law schools in the U.S. and abroad (e.g., Scott Hirst (BU), Robert Jackson (NYU), Marcel Kahan (NYU), Kobi Kastiel (Tel-Aviv), Yaron Nili (Duke), Roberto Tallarita (Harvard) and Holger Spamann (Harvard)).

Interested candidates should submit a CV, a writing sample, and a cover letter to the coordinator of the Program, at [email protected]. The cover letter should describe the candidate’s experience, reasons for seeking the position, career plans, and the period during which they would like to work with the Program.

Applications are considered on a rolling basis, and the start date is flexible. Candidates should apply only if they seek to stay at the Program for two years. All personnel appointments at the Program are for one year, but the appointment period is generally extendable for additional one-year period/s (subject to business needs and satisfactory performance).

Audit Committee Considerations for SEC’s Proposal on Semiannual Reporting

Posted by Kathy Nieland, Tracey-Lee Brown, and Gregory Johnson, PricewaterhouseCoopers LLP, on
Wednesday, July 1, 2026
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Kathy Nieland is a Partner, and Tracey-Lee Brown and Gregory Johnson are Directors at the Governance Insights Center, PricewaterhouseCoopers LLP. This post is based on their PwC memorandum.

What the audit committee needs to know

On May 5, the SEC issued a rule proposal that would provide an optional semiannual reporting framework as an alternative to the existing quarterly reporting framework. The optional semiannual reporting framework would be available to any registrant currently required to file a quarterly report on Form 10-Q.

Form 10-S would replace Form 10-Q for semiannual filers

A company that elects the semiannual reporting framework (a semiannual filer) would forgo filing quarterly reports on Form 10-Q (for the first, second, and third quarters of its fiscal year) and would instead file one interim report covering the first half of the fiscal year on new Form 10-S. Form 10-S would require the same information that is currently required by Form 10-Q, except that the financial information (and related disclosures) would cover the fiscal six-month period instead of a quarter. Unlike Form 10-Q, which requires presentation of both quarter-to-date and year-to-date periods, Form 10-S would only require presentation of the year-to-date (i.e. semiannual) period, though voluntary presentation of quarterly information would be permitted. The financial statements in Form 10-S would be required to be (1) prepared under US GAAP, (2) reviewed by the auditor, and (3) data tagged using Inline XBRL.

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