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Program on Corporate Governance Advisory Board
- Peter Atkins
- David Bell
- Kerry E. Berchem
- Richard Brand
- Daniel Burch
- Paul Choi
- Jesse Cohn
- Arthur B. Crozier
- Renata J. Ferrari
- Andrew Freedman
- Ray Garcia
- Joseph Hall
- Jason M. Halper William P. Mills
- David Millstone
- Theodore Mirvis
- Philip Richter
- Elina Tetelbaum
- Sebastian Tiller
- Marc Trevino
- Steven J. Williams
Author Archives: Harvard Law School Forum on Corporate Governance and Financial Regulation
The “Buy Side” View on CEO Pay
Executive compensation is a highly controversial topic. Seventy percent of Americans believe that CEO compensation among large publicly traded corporations is a problem. Twenty-five percent of directors believe that CEOs do not receive the correct level of pay based on the expected value of awards when they are granted; and 30 percent of directors believe […]
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Posted in Academic Research, Accounting & Disclosure, Executive Compensation, Institutional Investors
Tagged Asset management, Compensation committees, Compensation disclosure, Compensation guidelines, Compensation ratios, Executive performance, Firm performance, Institutional Investors, Management, Pay for performance, Say on pay, Surveys
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Ninth Circuit’s Approval of Compensation Clawback for Executives Not Engaged in Misconduct
[On August 31, 2016], the Ninth Circuit issued an opinion in SEC v. Jensen. The court held that Rule 13a-14 of the Securities Exchange Act confirms that the SEC has a cause of action against CEOs and CFOs who sign false or misleading certifications. (Op. at 5, 24.) Importantly, the court also held that Section […]
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Posted in Court Cases, Executive Compensation, Practitioner Publications, Securities Litigation & Enforcement, Securities Regulation
Tagged Clawbacks, Disgorgement, Exchange Act s.13, Executive Compensation, Financial reporting, Management, Misconduct, Misreporting, SEC, SEC enforcement, Securities enforcement, Securities regulation, SOX, SOX Section 304, U.S. federal courts
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A New Vein of Liability: Limits on Director Compensation
Compensation committees composed of independent outside directors were created as the check-and-balance guardians against management compensation engorgement. But as the Roman philosopher Cicero famously posed, “Who guards the guards?” A few, relatively recent cases stemming from director compensation—most prominently involving outside directors at Citrix and Facebook—have opened up a new front for the Delaware plaintiff’s […]
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Posted in Boards of Directors, Court Cases, Practitioner Publications, Securities Litigation & Enforcement
Tagged Agency costs, Boards of Directors, CD&A, Compensation committees, Compensation disclosure, Corporate liability, Delaware cases, Delaware law, Director compensation, Say on pay, Settlements, Shareholder suits
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Political Lending
In a new paper, Political Lending, we investigate a previously unexplored channel that could be used by firms to enhance the wealth of individual politicians: the amount and terms of the personal debt taken on by politicians and their close family members. Personal debt is economically significant as liabilities are close to 40% of the […]
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Posted in Academic Research, Accounting & Disclosure, Banking & Financial Institutions, Empirical Research, Financial Regulation
Tagged Bank loans, Banks, Behavioral finance, Campaign finance, Conflicts of interest, Debt, Disclosure, Financial institutions, Financial regulation, Social capital, US House, US Senate
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The Diminishing Availability of Post-Closing Damages in Non-Controller M&A Transactions
Both Miami v. Comstock (Aug. 24, 2016) and Larkin v. Shah (Aug. 25, 2016) reflect the evolution of recent Delaware jurisprudence toward affording significantly greater deference to directors’ and stockholders’ decisions in non-controller transactions. In both cases, the Delaware Court of Chancery dismissed the plaintiffs’ post-closing actions for damages that were based on claims of […]
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Posted in Accounting & Disclosure, Corporate Elections & Voting, Court Cases, Mergers & Acquisitions, Practitioner Publications
Tagged Boards of Directors, Business judgment rule, Conflicts of interest, Delaware cases, Delaware law, Disclosure, Duty of loyalty, Fairness review, Fiduciary duties, Merger litigation, Mergers & acquisitions, Shareholder suits, Shareholder voting
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Climate Change, Sustainability and Other Environmental Proposals
In recent years, a growing group of investors has called upon issuers to make available certain sustainability-related disclosures. In this same vein, several non-profit organizations, such as the Sustainability Accounting Standards Board (“SASB”), the Global Reporting Initiative (“GRI”), the Climate Disclosure Standards Board (“CDSB”) and the International Integrated Reporting Counsel (“IIRC”), have developed voluntary sustainability […]
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Posted in Accounting & Disclosure, Boards of Directors, Corporate Elections & Voting, Corporate Social Responsibility, Institutional Investors, Practitioner Publications
Tagged Climate change, Corporate Social Responsibility, Environmental disclosure, ESG, Glass Lewis, Institutional Investors, ISS, No-action letters, Proxy advisors, Proxy season, Proxy voting, Rule 14a-8, SEC, Shareholder proposals, Shareholder voting, Sustainability
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The Effect of Prohibiting Deal Protection in M&A: Evidence from the United Kingdom
In any public-company acquisition, the need for shareholder and regulatory approvals creates a window between the date of the deal signing/announcement and the date that the acquirer can close the deal. This window, which is approximately three months on average, introduces the possibility that a higher-value bid will emerge between the signing and the closing. […]
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Posted in Academic Research, Comparative Corporate Governance & Regulation, Empirical Research, HLS Research, International Corporate Governance & Regulation, Mergers & Acquisitions
Tagged Acquisition agreements, Acquisitions, Bidders, Deal protection, International governance, Mergers & acquisitions, Offer pricing, Shareholder value, Termination fees, UK
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Disclosure-Only Settlements in M&A Litigation
Since our last blog post on the changing landscape of disclosure-only settlements in the Delaware Court of Chancery, there have been developments in several areas, including the continued lower filing rates for shareholder litigation in Delaware, the adoption of the Trulia “plainly material” standard for supplemental disclosures by the Seventh Circuit, and the lower standard […]
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Posted in Accounting & Disclosure, Court Cases, Mergers & Acquisitions, Practitioner Publications
Tagged Class actions, Delaware cases, Delaware law, Disclosure, In re Trulia, Materiality, Merger litigation, Mergers & acquisitions, Settlements, Shareholder suits, State law, U.S. federal courts
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CEO Pay and the Rise of Relative Performance Contracts: A Question of Governance?
Lacklustre growth seems to be the new normal almost everywhere in the world except for one area—the pay of Chief Executive Officers (CEO). For S&P500 firms, the average CEO made 31 times the wage of the average production worker in 1970 but rose to 325 by 2008 (Conyon et al., 2011) and 335 in 2015. […]
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Posted in Academic Research, Comparative Corporate Governance & Regulation, Empirical Research, International Corporate Governance & Regulation
Tagged Equity-based compensation, Executive Compensation, Executive performance, Executive value, Firm performance, Institutional monitoring, International governance, Long-Term value, Management, Pay for performance, Peer groups, Transparency, UK
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