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An Academic Perspective on Shareholder Activism as a Corrective Mechanism

The editors at the Corporate Governance & Social Responsibility blog brought our attention to a recent academic paper from The Ohio State University Moritz College of Law titled “Shareholder Activism as a Corrective Mechanism in Corporate Governance.” In the paper’s abstract, authors Paul Rose and Bernard Sharfman write: Under an Arrowian framework, centralized authority and … Continue Reading

Shareholder Approval of Equity Incentive Plan; Has It Been Five Years?

Most equity incentive plans have a number of different shareholder-approved business criteria for setting performance goals and allow the compensation committee to select the criteria each year. This practice generally requires re-approval of the goals by the shareholders under Internal Revenue Code Section 162(m) whenever the committee makes a material change to the criteria. If … Continue Reading

Lessons From In re Trados: Delaware Courts Skeptical of Independence of Directors of Portfolio Companies

In our previous posts about In re Trados available here and here, we provided some background about the facts, outcome and usefulness of the Trados case, as well as a discussion of the conflicting interests of the preferred stockholders and common stockholders. In this installment, we will discuss the issue of director independence and conflicts … Continue Reading

So Where to Next for Corporate Governance?

This post appeared originally on the Corporate Governance & Social Responsibility blog. The Federal Securities Law Blog thanks the author for allowing us to share it with you. It was a pretty normal day until Marc Smith called me for a chat on Skype. Marc is a sociologist of computer-mediated collective action at Connected Action … Continue Reading

Lessons from In re Trados: Conflicting Interests of Preferred and Common Stockholders

In our previous post about In re Trados, we provided some background on the facts, outcome and usefulness of the Trados case. In this installment, we will discuss the conflict of interest between the preferred stockholders and the common stockholders of Trados and the related analysis conducted by the Delaware Court of Chancery. Divergence in Interests … Continue Reading

Are You Sure You’re S-3 Eligible? A Reminder to Disclose the Board’s Decision Regarding Frequency of Say-on-Pay Vote on Form 8-K

Though most reporting companies conducted their first say-on-pay vote in 2011 and disclosed the shareholder voting results on Form 8-K, some companies overlooked the additional requirement to disclose the board of directors’ decision (in light of the shareholders’ advisory vote) regarding the frequency that the company will conduct say-on-pay votes. A company’s failure to file … Continue Reading

Icahn Re: Apple: Shareholder Activism or Stock Manipulation?

At 2:21 p.m. and at 2:25 p.m., on August 13, 2013, Carl Icahn issued the following tweets: Shortly after sending that tweet, Apple shares jumped on the news closing 4.8% higher for the day, increasing Apple’s market cap by almost $17.1 billion. Mr. Icahn’s tweets have been viewed as shareholder activism. Not many individuals have … Continue Reading

District Court Vacates Resource Extraction Issuer Payment Disclosure Rules; May Foreshadow Ruling on Conflict Minerals Challenge

On July 2, 2013, the United States District Court for the District of Columbia (the “Court”) vacated Securities and Exchange Commission (“SEC”) Rule 13q-1 (the “Rule”), which required certain companies to disclose payments made to foreign governments in connection with the commercial development of oil, natural gas or minerals. The Court found that (i) the … Continue Reading

Government’s Vigorous Prosecution of FCPA Violators Continues When Jury Convicts Two Telecommunications Executives for Violations Relating to Haiti

On Friday, August 5, 2011, a Florida jury convicted Joel Esquenazi and Carlos Rodriguez, former executives of Terra Telecommunications Corporation, for their roles in a conspiracy to violate the FCPA and commit money laundering. U.S. v. Esquenazi, Case No. 09-cr-21010 (S.D. Fla. Filed Dec. 4, 2009), The convictions were the latest event in Government’s aggressive … Continue Reading
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