Mergers and Acquisitions, Corporate Governance, Shareholder Activism
The following post was originally included as part of our recently published memorandum “Selected Issues for Boards of Directors in 2020”.
Investors and other stakeholders continue to focus on environmental, social and governance (ESG) issues at public companies, both as a driver of financial performance and as a factor of social importance.
The…
The following post was originally included as part of our recently published memorandum “Selected Issues for Boards of Directors in 2020”.
We foresee investors continuing to both refine and expand their demands on corporate boards in 2020. With the particular focus on board refreshment and diversity, significant pressure is placed on nominating and…
The following post was originally included as part of our recently published memorandum “Selected Issues for Boards of Directors in 2020”.
The era of stakeholder governance and corporations with a purpose beyond profits is taking hold, with corporate directors expected to answer to more constituencies and shoulder a greater burden than ever before.…
The following post was originally included as part of our recently published memorandum “Selected Issues for Boards of Directors in 2020”.
Enforcement of anti-bribery, sanctions and money laundering laws remains a top priority for US authorities. In 2019, the US Department of Justice and civil regulators issued new or updated policies aimed at…
Recent changes in political climates, legal reforms and social norms have had varying (and sometimes conflicting) impacts on how companies are run; however, they have all contributed to a growing demand that companies expand their focus beyond shareholder value creation.
Environmental, social and governance concerns dominate shareholder proposals and engagement efforts, and discussions of corporate…
The SEC is taking renewed aim at earnings management, and this time it’s not just improper revenue recognition.
Both in its recent enforcement order against Marvell Technology Group – imposing s $5.5 million fine and a cease-and-desist order – and in its on-going action against Under Armour,[1] the SEC has focused on what, anecdotally, is not a terribly uncommon practice – accelerating (or “pulling in”) sales from a future quarter to the present in order to “close the gap between actual and forecasted revenue.”[2] In both cases, the schemes consisted of offering various incentives, such as “price rebates, discounted prices, free products, and extended payment terms”[3] to entice customers to accept products in the current quarter that they would not need until the next. In an environment of declining sales, these inorganic efforts to meet earnings numbers allegedly misled the market about the direction of the business.…
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A week after Glass Lewis issued its 2020 proxy voting guidelines,[1] Institutional Shareholder Services (ISS) released its final updates to its 2020 proxy voting policies. The updated policies will be applied to shareholder meetings beginning on February 1, 2020, and the changes to U.S. polices are summarized below.…
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Glass Lewis recently released its 2020 proxy voting guidelines and shareholder initiatives.[1] The following is a summary of Glass Lewis’ proposed changes and updates for 2020. Most significantly, the updated guidelines reflect a response to the Securities and Exchange Commission’s recent announcement that it may decline to take a view or may respond orally to no-action requests for shareholder proposals under Rule 14a-8 of the Exchange Act.[2] Starting in 2020, Glass Lewis generally will recommend a vote against members of a company’s governance committee if a company omits a shareholder proposal from its proxy statement without evidence of receiving no-action relief from the SEC, as described in more detail below.…
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Vice Chancellor Slights, of the Delaware Court of Chancery, included a slightly self-effacing, and only slightly humorous, note in his recent opinion in a fiduciary claim against the directors of Tesla, Inc., to the effect that the defendants have reason to believe that they drew the wrong judge in the case. The case relates to the 2018 incentive compensation award to Tesla’s CEO, Elon Musk, that caps out at about $55 billion (that “b” is not a typo). The footnote concerns, in part, Vice Chancellor Slights’ determination, in a separate recent claim alleging fiduciary breaches by the Tesla board, that members of Tesla’s board were not independent.[1]…
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The CEOs of 150 major US public companies recently pledged to act for all of their “stakeholders” – customers, employees, suppliers, communities and yes, even stockholders.[1] Much commentary ensued. But before we get too excited about whether these CEOs are grasping the mantle of government to act on behalf of the citizenry and other people who aren’t paying them, there is the prior question of whether, as a matter of Delaware law, they can.…
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