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, Debevoise & Plimpton, Gibson Dunn, Latham & Watkins, Mayer Brown, Pearl Meyer & Partners, Ropes & Gray, Shearman & Sterling, Simpson Thacher, Skadden, and White & Case.
The Program on Institutional Investors wishes to thank the institutional members of the Harvard Institutional Investor Forum.
The Harvard Roundtable on Long-Term Value Creation is grateful for the sponsorship of Broadridge, CFA Institute, Chevron Corporation, Coca-Cola, Deloitte, Ernst & Young, Evercore Partners, Houlihan Lokey, Innisfree M&A Inc., JPMorgan Chase, KPMG, Lazard, Pearl Meyer & Partners, PepsiCo, Pfizer, PricewaterhouseCoopers, Prudential Financial, Relational Investors LLC, Sard Verbinnen & Co, and United Health.
May 20, 2014
Loeb House, 17 Quincy Street
May 21, 2014
Wasserstein Hall, 1585 Massachusetts Avenue
|8:15–9:00 am||Registration and continental breakfast|
|9:00–10:25 am||First morning session|
|10:25–10:45 am||Coffee Break|
|10:45–12:10 pm||Second morning session|
|12:10–1:20 pm||Buffet lunch|
|1:20–2:35 pm||First afternoon session|
|2:35–2:55 pm||Coffee Break|
|2:55–4:10 pm||Final session|
|4:10–5:00 pm||Closing reception|
The first part of the Roundtable will focus on short-termism and investor engagement with issuers. Participants will discuss the opposing views regarding the extent to which investor engagement produces short-termism and discourages long-term value creation. The discussion will consider some current issues within this broad debate, such as classified boards and annual elections, poison pills (including low-threshold poison pills), incentive schemes for nominees of activist investors, Section 13(d) reporting requirements, and other related topics that may be of interest to participants.
The second part of the Roundtable will focus on short-termism and the internal organization of issuers and investors. The discussion will consider the internal arrangements and compensation practices of institutional investors, arrangements for encouraging long-term shareholder loyalty, the internal arrangements of issuers, and other related topics that may be of interest to participants.
Short-Termism and Investor Engagement with Issuers
Different Views on the Long-Term Effects of Engagement
- Aspen Institute, Long-Term Value Creation: Guiding Principles for Corporations and Investors
- Lucian Bebchuk, The Myth that Insulating Boards Serves Long-Term Value; a summary of the paper is also available here
- Lucian Bebchuk, Alon Brav and Wei Jiang, The Long-Term Effects of Hedge Fund Activism; a summary of the paper is also available here
- Justin Fox & Jay W. Lorsch, What Good Are Shareholders?
- Mark Roe, Corporate Short-Termism—In the Boardroom and in the Courtroom; a summary of the paper is also available here
- Chancellor Leo E. Strine, Can We Do Better by Ordinary Investors? A Pragmatic Reaction to the Dueling Ideological Mythologists of Corporate Law; a summary of the paper is also availablehere.
- Wachtell, Lipton, Rosen & Katz, Bite the Apple; Poison the Apple; Paralyze the Company; Wreck the Economy
- Wachtell, Lipton, Rosen & Katz, Current Thoughts About Activism, Revisited
Current Issues Regarding Short-Termism
Classified Boards and Annual Elections
- Shareholder Rights Project, The Shareholder Rights Project Report for the 2012 and 2013 Proxy Seasons; a summary of the Report is available here.
- Wachtell, Lipton, Rosen & Katz, Harvard’s Shareholder Rights Project Is Wrong
- Wachtell, Lipton, Rosen & Katz, Harvard’s Shareholder Rights Project Is Still Wrong
Poison Pills and Low-Threshold Poison Pills
- Lucian Bebchuk, Don’t Make Poison Pills More Deadly
- Cleary Gottlieb Steen & Hamilton, Delaware Court Denies Activist’s Motion to Enjoin Sotheby’s Shareholder Meeting
Incentive Schemes for Nominees of Activist Investors
- Cleary Gottlieb Steen & Hamilton, Incentive Schemes for Nominees of Activist Investors
- Carl Icahn, Disqualifying Dissident Nominees: A New Trend in Incumbent Director Entrenchment
Section 13(d) Reporting Requirements
- Wachtell, Lipton, Rosen & Katz, Petition for Rulemaking Under Section 13 of the Securities Exchange Act of 1934
- Lucian Bebchuk, Alon Brav, Robert Jackson and Wei Jiang, Pre-Disclosure Accumulations by Activist Investors: Evidence and Policy; a summary of the paper is also available here
- Lucian Bebchuk and Robert Jackson, The Law and Economics of Blockholder Disclosure; a summary of the paper is also available here
- Wachtell, Lipton, Rosen & Katz, Activist Abuses Require SEC Action on Section 13(d) Reporting
The Current Landscape of Shareholder Activism
- Schulte Roth & Zabel, Shareholder Activism: 2013 and Beyond, pp. 5-7, 26-27
- Simpson Thacher & Bartlett, Shareholder Activism in M&A Transactions
A consolidated PDF of materials regarding ‘Short-Termism and Investor Engagement with Issuers’ is available here. The consolidated PDF contains the shorter pieces from the materials, and summaries or excerpts from the longer papers.
Short-Termism and the Internal Organization of Issuers and Investors
The Internal Arrangements and Compensation Practices of Institutional Investors
- Jane Ambachtsheer, Richard Fuller, and Divyesh Hindocha (Mercer), Behaving Like an Owner: Plugging Investment Chain Leakages
- Dominic Barton and Mark Wiseman, Focusing Capital on the Long-Term
- Carl Icahn, Will the New Shareholder-Director Exchange Achieve its Potential?
- Tomorrow’s Company, Tomorrow’s Value: Achieving Long-Term Financial Returns; a summary of the paper is also available here
- The Marathon Club, Guidance Note for Long-Term Investing (Final Report, Spring 2007), pp. 1-9, 20-24, 27
- Mihir Desai, The Incentive Bubble
Arrangements for Encouraging Long-Term Shareholder Loyalty
- Patrick Bolton and Frederic Samama, L-Shares: Rewarding Long-term Investors; a summary of the paper is also available here
- Barry B. Burra, Mercer Seeks Long-Term Shareholder Rewards Program from Corporations, Pensions & Investments
- John Kay, The Kay Review of UK Equity Markets and Long-term Decision Making (Final Report, July 2012), pp. 9-13, 63-64
- Jesse M. Fried, The Uneasy Case for Favoring Long-Term Shareholders; a summary of the paper is also available here
The Internal Arrangements of Issuers
- Dominic Barton and Mark Wiseman, Summary of the CPP Investment Board and McKinsey Survey
- Lucian Bebchuk and Jesse Fried, Paying for Long-Term Performance; a summary of the paper is also available here.
- CFA & Business Roundtable Report, Breaking the Short-Term Cycle: Discussion and Recommendations on How Corporate Leaders, Asset Managers, Investors and Analysts Can Refocus on Long-Term Value, pp. 9-10
- Financial Reporting council, Consultation on the UK Corporate Governance Code (Directors’ Remuneration), Press Release, April 2014
- Robert Pozen, Curbing Short-Termism in Corporate America: Focus on Executive Compensation; a summary of the paper is also available here
- Skadden, Arps, Slate, Meagher & Flom, Rethinking Director Nomination Requirements and Conduct
A consolidated PDF of materials regarding ‘Short-Termism and the Internal Organization of Issuers and Investors’ is available here. The consolidated PDF contains the shorter pieces from the materials, and summaries or excerpts from the longer papers.