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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
SEC Adopts Pay Ratio Disclosure Rules
The SEC yesterday [August 5, 2015] voted 3-2 to adopt the long-awaited final pay ratio disclosure rules under the Dodd-Frank Act. The rules add new Item 402(u) of Regulation S-K, which will require SEC reporting companies to disclose annually (1) the median of the annual total compensation of all of their employees, excluding the CEO, (2) the annual […]
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Posted in Accounting & Disclosure, Executive Compensation, Legislative & Regulatory Developments, Practitioner Publications, Securities Regulation
Tagged Compensation disclosure, Compensation ratios, Dodd-Frank Act, Executive Compensation, Management, Regulation S-K, SEC, SEC rulemaking, Securities regulation
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SEC Chair’s Statement on Pay Ratio
To say that the views on the pay ratio disclosure requirement are divided is an obvious understatement. Since it was mandated by Congress, the pay ratio rule has been controversial, spurring a contentious and, at times, heated dialogue. The Commission has received more than 287,400 comment letters, including over 1,500 unique letters, with some asserting […]
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Posted in Accounting & Disclosure, Executive Compensation, Practitioner Publications, Regulators Materials, Securities Regulation, Speeches & Testimony
Tagged Accountability, Compensation disclosure, Compensation ratios, Dodd-Frank Act, Dodd-Frank s.953, Executive Compensation, Management, Pay for performance, Say on pay, SEC, SEC rulemaking, Securities regulation
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The CEO Pay Ratio Rule
Today [August 5, 2015], the Commission takes another step to fulfill its Congressional mandate to provide better disclosure for investors regarding executive compensation at public companies. As required by Section 953(b) of the Dodd-Frank Act, today’s rules would require a public company to disclose the ratio of the total compensation of its chief executive officer […]
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Posted in Accounting & Disclosure, Executive Compensation, Practitioner Publications, Regulators Materials, Securities Regulation, Speeches & Testimony
Tagged Accountability, Compensation disclosure, Compensation ratios, Dodd-Frank Act, Dodd-Frank s.953, Executive Compensation, Management, Pay for performance, Say on pay, SEC, SEC rulemaking, Securities regulation
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Dissenting Statement on Pay Ratio Disclosure
When the pay ratio disclosure rule was originally proposed, I objected to its consideration on the grounds that the Commission and its staff should not spend our limited resources on any rulemaking that unambiguously harms investors, negatively affects competition, promotes inefficiencies, and restricts capital formation—especially when there is no statutory deadline for completion. Pursuing a […]
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Posted in Accounting & Disclosure, Practitioner Publications, Regulators Materials, Securities Litigation & Enforcement, Securities Regulation, Speeches & Testimony
Tagged Compensation disclosure, Compensation ratios, Dodd-Frank Act, Dodd-Frank s.953, Executive Compensation, Management, Pay for performance, Say on pay, SEC, SEC rulemaking, Securities regulation
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Corporate Investment in ESG Practices
Corporate investment in environmental, social, and governance (ESG) practices has been widely investigated in recent years. Studies show that a business corporation may benefit from these resource allocations on multiple levels, ranging from higher market and accounting performance to improved reputation and stakeholder relations. However, poor data quality and the lack of a universally adopted […]
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Posted in Accounting & Disclosure, Corporate Social Responsibility, Empirical Research, Practitioner Publications
Tagged Boards of Directors, Compliance & ethics, Corporate culture, Corporate Social Responsibility, Diversity, Engagement, Environmental disclosure, Firm performance, Long-Term value, Reputation, Sustainability
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Prices and Informed Trading
In our paper, Do Prices Reveal the Presence of Informed Trading?, forthcoming in the Journal of Finance, we study how empirical measures of stock illiquidity and of adverse selection respond to informed trading by activist shareholders. An extensive body of theory suggests that stock illiquidity, as measured by the bid-ask spread and by the price […]
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Posted in Academic Research, Accounting & Disclosure, Empirical Research, Securities Regulation
Tagged Adverse selection, Disclosure, Information asymmetries, Information environment, Inside information, Liquidity, Market reaction, Market timing, Rule 13d-1, Schedule 13D, Securities Act, Shareholder activism, Signaling, Stock performance
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New Guidance on Advance Notice By-Laws
Hill International, Inc. (“Hill”), a publicly traded company, and one of its stockholders, Opportunity Partners L.P. (“Opportunity”), recently engaged in a dispute regarding whether Opportunity had timely submitted two proposals for items of business for consideration and two director nominations for election at Hill’s 2015 annual meeting. On appeal from the Delaware Chancery Court, the […]
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Posted in Boards of Directors, Court Cases, Practitioner Publications
Tagged Advanced notice, Board communication, Boards of Directors, Charter & bylaws, Delaware cases, Delaware law, Proxy materials, Proxy season, Shareholder communications, Shareholder proposals, Shareholder suits
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Independent Chair Proposals
During the 2015 proxy season, 64 independent chair proposals were submitted to Russell 3000 companies, 62 of which reached a shareholder vote. This statistic is generally consistent with the number of proposals brought to a vote in 2014 and 2013, respectively. Issuers that received an independent chair proposal this year, however, may have found it more […]
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Posted in Boards of Directors, Corporate Elections & Voting, Institutional Investors, Practitioner Publications, Securities Regulation
Tagged Board independence, Boards of Directors, Glass Lewis, Institutional Investors, ISS, No-action letters, Proxy advisors, Proxy voting, Rule 14a-8, SEC, Securities regulation, Shareholder activism, Shareholder proposals, Shareholder voting
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Is Proxy Access Inevitable?
Efforts by shareholders to directly influence corporate decision-making are intensifying, as demonstrated by the significant increase over the past three years in financially focused shareholder activism and the more recent efforts by large institutional investors to encourage directors to “engage” with shareholders more directly. Through the collective efforts of large institutional investors, including public and […]
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Posted in Boards of Directors, Corporate Elections & Voting, Institutional Investors, Practitioner Publications, Securities Regulation
Tagged Board communication, Boards of Directors, Charter & bylaws, Glass Lewis, Institutional Investors, ISS, Private ordering, Proxy access, Proxy advisors, Proxy season, Proxy voting, Rule 14a-11, Rule 14a-8, SEC, SEC rulemaking, Securities regulation, Shareholder proposals, Shareholder rights, Shareholder voting
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Mutual Fund Flows When Managers Have Foreign-Sounding Names
In our paper What’s in a Name? Mutual Fund Flows When Managers Have Foreign-Sounding Names, forthcoming in the Review of Financial Studies, we show that name-induced stereotypes affect the investment choices of U.S. mutual fund investors. Managers with foreign-sounding names have about 10% lower annual fund flows, and this effect is stronger among funds with […]
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Posted in Academic Research, Empirical Research, Institutional Investors
Tagged Behavioral finance, Capital allocation, Diversity, Fund managers, Institutional Investors, Mutual funds, Public perception
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