Co-Organizers: Lucian Bebchuk, Stephen Davis, and Scott Hirst
The Program on Corporate Governance wishes to thank its supporting organizations: Cleary Gottlieb, Compass Lexecon, Cornerstone Research, Corporation Service Company, Davis Polk, Gibson Dunn, Latham & Watkins, Mayer Brown, Pearl Meyer & Partners, Ropes & Gray, Shearman & Sterling, Simpson Thacher, and Skadden.
The Program on Institutional Investors wishes to thank the institutional members of the Harvard Institutional Investor Forum.
The Harvard Roundtable on Activist Interventions is grateful for the sponsorship of Broadridge, Cadwalader, Wickersham & Taft, CFA Institute, Coca Cola, Credit Suisse, Deloitte, EMC Corporation, Evercore Partners, Innisfree M&A Inc., Lazard, Morgan Stanley, Okapi Partners, Olshan Frome Wolosky LLP, Pearl Meyer & Partners, PepsiCo, Pfizer, Prudential Financial, Relational Investors LLC, and Vinson & Elkins.
March 25, 2014
Harvard Club of New York City, 35 West 44th Street
|6:30 pm||Reception followed by dinner (Optional)|
March 26, 2014
Harvard Club of New York City, 35 West 44th Street
|8:15–9:00 am||Registration and Breakfast|
|9:00–10:40 am||First Session|
|10:40–11:00 am||Coffee Break|
|11:00–12:40 pm||Second Session|
|12:40–2:00 pm||Lunch Reception|
The Roundtable will begin with a discussion of the empirical study by Lucian Bebchuk, Alon Brav and Wei Jiang, entitled “The Long-Term Effects of Hedge Fund Activism”, and the critiques of this study put forward by Wachtell, Lipton, Rosen & Katz; Lucian Bebchuk and Martin Lipton will present. The Roundtable will then move to a general discussion of activist interventions.
Depending on the interest of participants, examples of questions that may be discussed include:
- Are activist interventions on the whole beneficial or detrimental to long-term value? Are there any particular types of activist interventions that are more likely or less likely to be beneficial, for example, interventions that decrease investments or increase payouts to shareholders?
- How do roundtable participants assess current marketplace practices concerning how activists and issuers engage? Could such practices be improved? If so, how?
- How do—and how should—non-activist investors deal with activist engagements?
- How well are proxy advisors performing in opining on activist interventions? Are there ways in which their performance could be improved?
- How do participants assess:
- The corporate arrangementsgoverning activist engagements, such as bylaws concerning advanced nomination bylaws and disclosure requirements for nominees;
- The recent practice of activists offering compensation arrangements for dissident directors, as well as company responsestothis practice, such as director disqualification bylaws;
- Low-threshold poison pills, as well as poison pills that treat Schedule 13D filers and Schedule 13G filers differently; and
- Possible reforms of Section 13(d) requirements.
- Are there different issues raised by activist engagements in opposition to proposed mergers and acquisition transactions?
- Are there conflicts of interest between activist investors and other investors?
We will focus throughout the session on situations where activists have emerged and begun to engage with an issuer. Broader questions regarding the potential adverse consequences of activist interventions (and the fear of such interventions), as well as the benefits or costs of corporate governance arrangements that reduce the likelihood of such interventions, will be part of the broader discussion planned for the Harvard Roundtable on Long-Term Value Creation that will take place at the Harvard Law School on May 21, 2014.
1. Empirical Work on the Long-Term Effects of Activist Interventions
The Roundtable will begin with a discussion of the recent study by Lucian Bebchuk, Alon Brav and Wei Jiang, entitled “The Long-Term Effects of Hedge Fund Activism”, and the critiques of the study put forward by Wachtell, Lipton, Rosen & Katz and responses by Bebchuk, Brav, and Jiang.
- The Long-Term Effects of Hedge Fund Activism, Lucian Bebchuk, Alon Brav, and Wei Jiang (PDF)
- Critiques by Wachtell, Lipton, Rosen & Katz and responses from Bebchuk, Brav, and Jiang
- Current Thoughts About Activism, Wachtell, Lipton, Rosen & Katz
- The Bebchuk Syllogism, Wachtell, Lipton, Rosen & Katz
- Don’t Run Away from the Evidence: A Reply to Wachtell Lipton, Lucian Bebchuk, Alon Brav, and Wei Jiang
- Empiricism and Experience; Activism and Short-Termism; the Real World of Business, Wachtell, Lipton, Rosen & Katz
- Still Running Away from the Evidence: A Reply to Wachtell Lipton’s Review of Empirical Work, Lucian Bebchuk, Alon Brav, and Wei Jiang
2. Materials on Activist Interventions from the Harvard Forum on Corporate Governance and Financial Regulation
- The Myth that Insulating Boards Serves Long-Term Value, Lucian Bebchuk
- Apple’s Cash-Flow Problem, Mark Roe
- Bite the Apple; Poison the Apple; Paralyze the Company; Wreck the Economy, Wachtell, Lipton, Rosen & Katz
- The Evolving Direction and Increasing Influence of Shareholder Activism, Shearman & Sterling
- Shareholder Activism: 2013 and Beyond, Schulte Roth & Zabel
Marketplace practices concerning issuers’ engagement with activists
- Activist Shareholders in the US: A Changing Landscape, Skadden, Arps, Slate, Meagher & Flom
- Adjusting to Shareholder Activism as the New Normal, Sullivan & Cromwell
- Dealing With Activist Hedge Funds, Wachtell, Lipton, Rosen & Katz
Activist engagements with other non-activist investors and proxy advisors
- Will The New Shareholder-Director Exchange Achieve Its Potential?, Carl Icahn
- Lessons from the 2013 Proxy Season, Wachtell, Lipton, Rosen & Katz
- Boards Should Minimize the Role of Proxy Advisors, Cadwalader, Wickersham & Taft
- The Disciplinary Effects of Proxy Contests, Vyacheslav Fos
- The Challenge for Boards, Cadwalader, Wickersham & Taft
Dissident directors’ compensation and director disqualification bylaws
- Bylaw Protection Against Dissident Director Conflict/Enrichment Schemes, Wachtell, Lipton, Rosen & Katz
- Director Qualification/Compensation Bylaw FAQs, ISS
- Disqualifying Dissident Nominees: A New Trend in Incumbent Director Entrenchment, Carl Icahn
- Incentive Schemes for Nominees of Activist Investors, Cleary Gottlieb Steen & Hamilton
Low-threshold poison pills and advance notice bylaws
- Don’t Make Poison Pills More Deadly, Lucian Bebchuk
- Rethinking Director Nomination Requirements and Conduct, Skadden, Arps, Slate, Meagher & Flom
Section 13(d) reform
- Petition for Rulemaking Under Section 13 of the Securities Exchange Act of 1934, Wachtell, Lipton, Rosen & Katz
- Should the SEC Tighten its 13(d) Rules?, Lucian Bebchuk and Robert Jackson
Shareholder activism in Canada and the United Kingdom
- Canada Proposes Improvements in Early Warning Disclosure, Rights Plans, Wachtell, Lipton, Rosen & Katz
- Shareholder Activism in the UK: An Introduction, Gibson, Dunn & Crutcher
3. Additional Materials on Activist Interventions Contributed by Participants
- Shareholder Activism: Impact on North American Corporate Sectors, Moody’s Investors Service
- Selected Issues for Boards of Directors in 2014, Cleary Gottlieb Steen & Hamilton LLP
- Preparing for Bigger, Bolder Shareholder Activists, McKinsey & Company