Author Archives: Harvard Law School Forum on Corporate Governance and Financial Regulation

Accountability and the Pursuit of SEC Clawback Actions

In two recent cases, the SEC affirmatively decided not to bring clawback actions under Section 304 of the Sarbanes-Oxley Act (“SOX”) against executives who reimbursed their respective companies for compensation they received following the filing of misstated financial statements. The first case involved an investigation into the accounting practices of Monsanto Company, a St. Louis-based agribusiness […]

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Demise of the Small IPO and the Investing Preferences of Mutual Funds

The decline of the small initial public offering (IPO) has been well-documented. It has been less noted that this decline happened in the space of a few years. In 1997 there were 464 non-financial IPOs and 46% were small IPOs. By 1998, this percentage declined to 30%, which would decline further to just 10% in 1999. […]

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Developments in Corporate Governance and M&A Law in 2015

There were important developments in 2015 in Delaware law concerning issues of corporate governance and/or arising in the context of M&A transactions. These developments arose from a number of sources, including statutory amendments to the Delaware General Corporation Law (DGCL), decisions issued by the Delaware Supreme and Chancery Courts, and SEC interpretive guidance.

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Posted in Boards of Directors, Court Cases, Mergers & Acquisitions, Practitioner Publications, Securities Regulation | Tagged , , , , , , , , , , , , , , , , , , | Comments Off on Developments in Corporate Governance and M&A Law in 2015

Optimal Inside Debt Compensation and the Value of Equity and Debt

Four decades ago, Jensen and Meckling (1976) provided the first analysis of a hypothetical compensation contract that included both equity and debt for a CEO. But until Bebchuk and Jackson (2005) and Sundaram and Yermack (2007) provided early analyses based on then newly available data on CEO pensions, the dominant view was that debt-like claims […]

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EGC Corporate Governance Practices Survey

Corporate governance has changed dramatically since passage of the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The level of shareholder engagement and institutional investor expectations regarding governance practices have also changed significantly. The passage of the Jumpstart Our Business Startups Act in April 2012, which helped […]

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Servants of Two Masters? The Feigned Hysteria Over Activist-Paid Directors

Director compensation in the U.S. has garnered much less attention than the compensation of executives. Directors are most often elected without challenge, based on the company’s recommendation. They serve, at least in theory, all shareholders and owe their duties to the corporation. In each company, directors are compensated equally regardless of their affiliation, credentials or […]

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Posted in Academic Research, Boards of Directors, Comparative Corporate Governance & Regulation, Corporate Elections & Voting | Tagged , , , , , , , , , , , , , | Comments Off on Servants of Two Masters? The Feigned Hysteria Over Activist-Paid Directors

Remarks of SEC Chair on Small and Emerging Companies

Good morning. Thank you very much, Sara and Steve. I want to extend a warm welcome to our new Committee members as well as those members who are returning. This Committee has been a continuing source of valuable expertise and advice to the Commission on a variety of important issues, as reflected in the Commission’s […]

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Down-Round Financings and Outstanding Equity Compensation

The recent market turmoil has forced VC firms and other private company investors to examine closely the real possibility of seeking financing at a lower valuation—what is often referred to as a “down round.” More recently, the New York Times observed in January, “The unicorn [1] wars are coming, as the downturn in the market […]

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Osborne Should Think Again On His Bank Surcharge

HSBC’s decision last week to keep its headquarters in London, after reports that it would leave the UK if the levy on bank liabilities were not lifted, will have been greeted with relief at the Treasury. However, there is good reason to think the Treasury got a bad deal, jeopardising financial safety for not very […]

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Posted in Academic Research, Banking & Financial Institutions, Comparative Corporate Governance & Regulation, Financial Regulation, HLS Research, International Corporate Governance & Regulation, Legislative & Regulatory Developments | Tagged , , , , , , , , , , , , , | Comments Off on Osborne Should Think Again On His Bank Surcharge

2015 CPA-Zicklin Index of Corporate Political Disclosure

On the eve of a blockbuster election year for political spending, more of America’s largest publicly traded companies are disclosing their corporate expenditures on politics and are starting to place restrictions on their political spending. These are key findings of the fifth annual CPA-Zicklin Index of Political Disclosure and Accountability that, for the first time, […]

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