2013

• Why shield corporations from disclosing political spending?, Reuters, December 16, 2013
  Corporate disclosure of political spending has been kicking around in shareholder proposals for about a decade, but the SEC was pushed into the debate in 2011, when a group of 10 law professors with varying views on the impact of such spending joined together to petition the SEC to develop disclosure rules. The professors, led by co-chairs Lucian Bebchuk of Harvard and Robert Jackson of Columbia, argued that the U.S. Supreme Court assumed when it expanded the First Amendment rights of corporations to engage in political speech in Citizens United v. Federal Election Commission that shareholders could monitor corporate expenditures to assure themselves that such spending was in their interests.
• Corporate ‘Dark Money’ To Get Free Pass After SEC Drops Disclosure Proposal, IR Magazine, December 4, 2013
  ‘The [SEC’s 2014] agenda now includes only overdue rules that the SEC is required to develop under Dodd-Frank and the JOBS Act,’ notes Lucian Bebchuk, a Harvard University law professor who has persistently petitioned the SEC to require corporate political spending disclosure […] Bebchuk was among 10 professors who submitted a petition to the SEC in 2011 requesting the disclosure rule. ‘While we are disappointed by the SEC’s decision to delay its consideration of rules requiring disclosure of corporate political spending, we hope the commission will consider such rules as soon as it is able to devote resources to rulemaking other than that required by Dodd-Frank and the JOBS Act,’ Bebchuk writes.
• SEC Drops Political Spending Disclosure from 2014 Agenda, OpenSecrets.org, December 3, 2013
  While corporations won’t need to worry about having to disclose their “dark money” in the 2014 midterms, transparency advocates are still optimistic about the future. In a blog post by two of the original sponsors of the SEC petition, Professors Lucian Bebchuk and Robert Jackson Jr. explain that despite the decision they are still “hopeful that, before too long, the SEC will consider, as it should, the merits of a rule requiring disclosure in this area.”
• Corporate ‘Dark Money’ To Get Free Pass After SEC Drops Disclosure Proposal, Huffington Post, December 2, 2013
  “Although disclosure of corporate political spending is no longer formally on the SEC’s agenda, this issue is not going away,” wrote Columbia Law School professor Robert Jackson, who wrote the initial proposal submitted to the SEC, and Harvard Law School professor Lucian Bebchuk on Monday. “Shareholder proposals requesting information on political spending have been submitted to a substantial number of large public companies, and many such public companies have been responding to shareholder concerns by voluntarily disclosing some information.”
• How to Profit From Today’s Shareholder Activism, Barron’s, November 30, 2013
  It might be tempting to jump into the shares favored by activists when a campaign is revealed, but experts caution patience. Targeted stocks typically rise 6% in the days just before and after an activist move is publicized, notes Lucian Bebchuck [sic], a professor at Harvard Law School.
• Golden Hellos, the Latest CEO Compensation Practice to Come Under Fire, Businessweek, November 27, 2013
  For years corporate boards have used so-called golden handcuffs (retention incentives) to keep treasured chief executive officers in the fold or provided golden parachutes (severance packages) to ease their departures. Lately, another gilded pay practice has taken hold: golden hellos, or multimillion-dollar signing bonuses used to get CEO candidates to join the team. … “Investors should be skeptical of golden hellos, which represent pay decoupled from performance and provide no retention incentives,” says Lucian Bebchuk, a Harvard Law School professor who has studied CEO pay.
• More CEOs receiving ‘golden hellos’ upon company arrival, InsideCounsel, November 20, 2013
  A study from governance-advisory firm GMI Ratings Inc. shows that more companies are recruiting CEOs through “golden hellos,” or multimillion-dollar signing bonuses that the new CEOs receive without working a day. Seventy different U.S. companies have given out these bonuses in 2013, up from just 41 in 2012. … “Investors should be skeptical of golden hellos, which represent pay decoupled from performance and provide no retention incentives,” said Harvard Law School Lucian Bebchuk, who has researched CEO pay, to Bloomberg. “Equity incentives that have not vested yet should best be viewed as ones that have not been earned yet.”
• Levine on Wall Street: Dysfunction at Dish, Bloomberg, November 19, 2013
  [Signing bonuses] are a reasonable way to attract an executive with lots of unvested comp at another firm that she’d be giving up to take a new job. But that has a bit of an arm’s-race problem: You pay a big up-front bonus to lure a new CEO, you pay her millions of dollars of stock and deferred comp to keep her loyalty if she’s good, and then she goes somewhere else that pays her a signing bonus to buy out that deferred comp. The signing bonus doesn’t just “provide no retention incentives,” as Lucian Bebchuk is quoted saying; it actually undermines the whole structure of executive retention.
• Golden Hellos Surge as CEOs Get Jumbo Signing Bonuses, Bloomberg, November 19, 2013
  More U.S. companies are luring top executives with multimillion-dollar “golden hello” signing bonuses, undeterred even as high-profile flameouts such as Ron Johnson’s short tenure at J.C. Penney Co. expose the risks. … “Investors should be skeptical of golden hellos, which represent pay decoupled from performance and provide no retention incentives,” said Lucian Bebchuk, a Harvard Law School professor in Cambridge, Massachusetts, who has researched CEO pay. “Equity incentives that have not vested yet should best be viewed as ones that have not been earned yet.”
• Petition for Disclosure on Political Spending Gains Support, Wall Street Journal, November 12, 2013
  In 2011, a group of 10 corporate- and securities-law professors, including Harvard Law School’s Lucian Bebchuk and Columbia Law School’s John Coffee, petitioned the Securities and Exchange Commission to write a rule requiring public companies to disclose their political activities, including campaign donations and lobbying efforts. Since then, the agency has received about 641,799 form letters and 1,800 other letters commenting on the petition, according to Felicia Kung, chief of the rule-making office in the SEC’s corporation-finance division.
• Bebchuk v. Lipton on Corporate Activism, Conglomerate, October 29, 2013
  We’ve been following the debate between Lucian Bebchuk and Martin Lipton on the value of activist shareholders with interest, and it still seems as if the protagonists see the world very differently. The debate has been occasioned by a paper from Bebchuk and his co-authors arguing, essentially, that activist shareholders increase returns to investors.
• The Morning Risk Report: Apple, Icahn, Gross, and Mother Teresa, Wall Street Journal, October 28, 2013
  In a 2010 paper entitled “Is Carl Icahn Good for Long-Term Shareholders: A Case Study in Shareholder Activism” researchers found positive stock price moves on announcement of Mr. Icahn’s taking a position in a firm, and attributed the difference in performance between firms he subsequently acquired or took private and firms that remained independent to the fact that the latter were able to resist his recommendations. This is consistent with research we spotlighted last month in which Harvard Law School professor Lucian Bebchuk found long term stock price and operating performance improvements in companies targeted by activists.
• The legal brain drain, Globes, October 20, 2013
  The Israeli pioneer among the faculty at Harvard is Prof. Arye (Lucian) Bebchuk, who is currently considered one of the most important scholars worldwide in the economic analysis of law. Bebchuk still teaches at Harvard, and he is responsible for bringing more than a few Israelis over. The doors for the two other Israeli faculty members, Prof. Yochai Benkler and Prof. Gabriella Blum, were opened in no small measure thanks to help from Bebchuk.
• Will Twitter Have Second-Class Shareholders? Bloomberg, October 20, 2013
  Harvard Law School professor Lucian Bebchuk studied about 2,000 companies for five years after takeover attempts, buyouts and other activists’ interventions from 1994 to 2007. He found that their performance improved — and kept on improving over five years — when compared with their peers.
• Why CEO Pay Will Keep Rising to Even More Insanely Unjustified Levels While Ordinary Workers Get Squeezed, Naked Capitalism, October 14, 2013
  And forget about the myth of the superstar CEO. Lucian Bebchuk, Martijn Cremers, and Urs Peyer analyzed what they called the CEO pay slice, which is the proportion the CEO took of the total pay of the top five execs that went to the CEO. The more the CEO took relative to the rest of the top team, the worse the company did. But CEO pay is strongly correlated with one metric: how many people they fire.
• Viewpoint: Twitter’s All-Male Board Spells Failure, Time, October 7, 2013
  Twitter needs to build a board that can adapt to the marketplace, quickly. Instead, Twitter has chosen to have a so-called classified board, in which elections of its seven directors will be spread out over a three-year period and is designed more for continuity than adaptability. Critics of the practice often point out that this leads to longer terms of service, thereby keeping turnover low. According to a report from the Harvard Law School Forum on Corporate Governance and Financial Regulation, the modern best practice is to moving to 1-year terms. This allows for more independently minded directors, not rubber stamps.
• Directors need to see social media as part of the job, Financial Times, October 6, 2013
  Nowhere is the generation gap more apparent than in the parallel universes inhabited by social media users and board directors. Stephen Davis of Harvard Law School, an expert on corporate governance, has written that “corporate governance and social media are trends newly met, and market participants are only at the very beginning of a learning curve”.
• Twitter’s Corporate Governance a Mixed Bag, Wall Street Journal, October 4, 2013
  Shareholders have put increasing pressure on companies to declassify their boards, with aid from Harvard Law School’s Shareholder Rights Project. According to the SRP, which is led by governance expert and Harvard Law professor Lucian Bebchuk, board declassification proposals represented over 11% of all governance proposals submitted to companies in the Russell 3000-stock index during the recent proxy season. It said nearly all of those proposals were submitted by pension funds that coordinated with the SRP.
• Activist Investors Go Big, Wall Street Journal, October 1, 2013
  Between 1994 and 2007, companies targeted by activist hedge funds experienced, on average, an initial 6% rise in their stock price and improved their performance against peers by about two-thirds, according to a study by Lucian Bebchuk, director of the corporate-governance program at Harvard Law School.
• Lipton Takes on Bebchuk over Shareholder Activism, Wall Street Journal, September 30, 2013
  Earlier this year, Martin Lipton, a founding partner of law firm Wachtell Lipton Rozen & Katz, and inventor of the poison pill, threw down a gauntlet to shareholder rights advocate Lucian Bebchuk, professor of law, economics and finance at Harvard Law School and director of its corporate governance program. The challenge: prove that shareholder activism has long-term benefits. Experts who spoke with Risk & Compliance Journal say that Bebchuk met the challenge, in a paper published in July.
• Memo to CEOs: Put shareholders second, Globe and Mail, September 26, 2013
  Paul Polman, the CEO of Unilever, thinks American-style capitalism is broken, and he blames, in good part, the cult of shareholder value that has been all the rage since the 1980s. Since taking the helm in 2009 of the Anglo-Dutch consumer products giant … Polman has eliminated quarterly profit reports, refused to give earnings guidance to analysts and informed hedge funds that they will not be indulged. He has railed against the theories of economists and biz-school gurus like Milton Friedman, Michael Jensen and Lucian Bebchuk, the high apostles of shareholder power and democracy.
• Some see opening for creditors in Tribune ‘safe harbor’ ruling, Reuters, September 25, 2013
  Creditors have finally won a ruling in their favor regarding the bankruptcy code’s “safe harbor” provision, which protects investors who profit from a leveraged buyout that renders a company insolvent. The ruling by U.S. District Judge Richard Sullivan in New York found that the safe harbor did not bar individual creditors, including Aurelius Capital Management, from pursuing state court lawsuits against scores of former Tribune Co investors. While Sullivan’s ruling on Monday dismissed the case for reasons of standing, experts said his safe harbor finding could have wider implications. “This is some pushback,” said Mark Roe, a professor at Harvard Law School. It follows growing concern among academics and lawyers that the “safe harbor” provision had been expanded well beyond its original intent, Roe said.
• Op-Ed by Carl Icahn: Challenging the Imperial Boardroom, Wall Street Journal, September 18, 2013
  The value of activism is further reinforced by Harvard Prof. Lucian Bebchuk and co-authors, who recently conducted an in-depth study of some 2,000 activist campaigns from 1994-2007. The study concluded that “operating performance improves following activist interventions,” and that these improvements continue for years after the intervention.
• Feature: corporate governance, Lexology, September 16, 2013
  The Harvard Law School Forum on Corporate Governance and Financial Regulation posted a summary of an article written by three finance and accounting professors on how blockholders of a company’s shares can affect corporate governance when they sell, or threaten to sell, those shares.
• With Huge War Chests, Activist Investors Tackle Big Companies, New York Times, August 30, 2013
  Unlike the [corporate] raiders, the current activists contends they are fighting for the interests of shareholders. … There is some evidence that the results bear that out. A study led by Lucian Bebchuk, a professor at Harvard Law School, published last month argues that companies singled out by these investors improved their operating performance within three years of an activist campaign.
• Legal Giants Wage War Over Role Of Activist Investors (A.K.A. Hedge Funds), Forbes, August 28, 2013
  In another corner is Harvard Law Professor Lucian Bebchuk, a prominent expert on corporate governance issues, who has been extolling a recent academic study of 2000 separate interventions by hedge funds into the process of creating “long-term value.” Bebchuk believes that “activist hedge funds benefit and do not have an adverse effect on the targets over the five-year period following the attack.” Bebchuk also has led the charge against the obscene compensation earned by American CEOs even when their companies do not perform in spectacular growth and profits.
• The long-term benefits of short-term investing, Globe and Mail, August 27, 2013
  Lucian Bebchuk of Harvard University and his co-authors looked at 2,000 hedge fund interventions over 14 years, and analyzed the results over the five years that followed. Their striking takeaway? “We find no evidence that interventions are followed by declines in operating performance in the long term.” In fact, they found that hedgies’ interventions are followed by improved operating performance.
• Are Activist Investors Really as Evil as CEOs Claim They Are? Fox Business, August 22, 2013
  Despite ample criticism of activist investors, a paper released last month that examined 2,000 interventions by activist hedge funds in a recent 13-year period found that operating performance meaningfully improves following activist interventions. … The paper, which was authored by Duke University professor Alon Brav, Harvard Law School’s Lucian Bebchuk and Columbia Business School’s Wei Jiang, found [that] … on average, target companies enjoy significant operational improvements in each of the five years following the investment disclosure.
• Pro-active, Breakingviews, August 16, 2013
  There is an ivory tower barbarian at the gate. Lucian Bebchuk, a Harvard Law School professor is ratcheting up his battle against corporate defenders like veteran lawyer Martin Litpon. … Lipton reckons Bebchuk has “aided and abetted” uppity investors in “a form of extortion.” Bebchuk, with the aid of two colleagues, fired back in a study that undermines Lipton’s credo that activists create only short-term share price props.
• Activism isn’t academic, Reuters TV, August 16, 2013
  Breakingviews columnists discuss the escalating dispute over activist investing between Harvard Law School professor Lucian Bebchuk and veteran lawyer Martin Lipton.
• In praise of activist investment, Reuters, August 14, 2013
  A new study, however, shows that not only do activist hedge funds prompt short-term gains in the shares of the companies they pressure, they do it without hurting longer-term returns and while improving long-term operating performance. … The study, by Lucian Bebchuk of Harvard, Alon Brav of Duke, and Wei Jiang of Columbia, looked at the data from about 2,000 interventions by activist hedge funds between 1994-2007, looking not just at performance before and just after, but for five years from the date of the intervention.
• Welcome to the golden age of activist investors, CNBC, August 14, 2013
  Last month, Harvard shareholder governance expert Lucian Bebchuk, professor Alon P. Brav of Duke University’s Fuqua School of Business, and professor Wei Jiang of Columbia Business School published a paper that looked at 2,000 interventions by hedge fund activists from 1994 to 2007. They found that in the short run, stocks tend to rise around 6 percent when activist investors get involved. More interestingly, their research showed that the gains were not temporary. In the five-year period after an activist investor shows up on the scene, the stock prices of companies targeted by activists tended to hold onto those gains. What’s more, this is true even when the activism employs hostile tactics, demands that companies increase leverage, or urges bigger payouts to shareholders.
• Penney’s Bill Is Past Due, Wall Street Journal, August 14, 2013
  The rap on activist hedge funds—that together they hurt the long-term interests of companies and their shareholders—doesn’t stand up to the data, according to a recent analysis conducted by Alon Brav of Duke University’s Fuqua School of Business with Lucian Bebchuk of Harvard Law School and Wei Jiang of Columbia Business School.
• 77-Year-Old Man Good At Twitter, Dealbreaker, August 13, 2013
  Here you can read Lucian Bebchuk’s claim that activist investors tend on the whole to improve the long-term operational performance of the companies they invest in, and here you can read Justin Fox’s application of that result to defend Bill Ackman, pointing out that his job is to “identify companies that [he thinks] could be worth a lot more than their share price indicates, and push for changes.”
• Op-Ed by Lucian Bebchuk: The Myth of Hedge Funds as ‘Myopic Activists,’ Wall Street Journal, August 07, 2013
• CEO Pay Continues Its Crazy Upward Spiral, PolicyMic, July 17, 2013
  “Short-term shareholders” is one of those loaded phrases that embattled companies love to use to describe troublesome activist hedge funds. How real is the label? Well, it may actually be a myth. And a new study shows that so-called short-term hedge funds actually create long-term value. … Mr. Lipton’s sometime foil, Lucian A. Bebchuk, a shareholder governance activist at Harvard and columnist for DealBook, took up this challenge. A recent paper by Mr. Bebchuk, Alon P. Brav and Wei Jiang examined more than 2,000 hedge fund activist events from 1994 to 2007. The authors found that in the short run, hedge fund interventions produced a 6 percent rise in stock prices. Over the longer term, a five-year period, these gains held and the firms did not underperform. Looking at other measures of returns, like returns on assets, they found similar results. The long-term gains from activism held even when the hedge funds advocated taking on leverage or other “quick buck” strategies.
• A Label for Activist Investors That No Longer Fits, New York Times, July 9, 2013
  The United States’ economic recovery continues to limp and wheeze along, but that hasn’t stopped CEOs from raking in millions in compensation and getting a big raise last year. The New York Times recently reported that median pay package of CEOs in 2012 was $15.1 million, a hefty jump of 16% from 2011. (Compensation included salary, cash bonuses, perks, and other forms of cash, and stock as well as stock options.) …Rather, boards of directors — who set CEO packages — are influenced by “various economic incentives, reinforced by social and psychological factors, to go along with arrangements favorable to top managers,” according to professors Lucian Bebchuk at Harvard Law School and Rakesh Khurana at Harvard Business School.
• Allowing Firms to Restrict Suits to Delaware to Change Legal Landscape, Wall Street Journal, July 7, 2013
  A recent ruling in Delaware is poised to change the landscape in big-ticket corporate litigation-to the delight of many companies and the likely chagrin of some shareholders. Chancellor Leo Strine of the Delaware Court of Chancery late last month ruled that corporate boards may adopt bylaws requiring that most shareholder lawsuits against the companies be filed in Delaware. … The ruling effectively gives the thousands of businesses incorporated in Delaware home-field advantage in shareholder suits. … “It is undesirable for boards to have the power to adopt such limitations unilaterally without shareholder approval,” said Lucian A. Bebchuk, a law professor at Harvard University and an expert on corporate governance. “Directors should not be setting the rules governing how they themselves may be sued.”
• New Momentum for Change in Corporate Board Elections, New York Times, July 7, 2013
  Shareholder efforts that actually succeed in changing dubious corporate governance policies are so rare that when they happen, it makes you sit up and take notice. So it’s worth examining the results achieved so far this year by the Shareholder Rights Project, a program operating at the Harvard Law School. And with any luck, its success might shame do-nothing investment managers, like those running many mutual funds, into action. … Directed by Lucian A. Bebchuk, a professor at the Harvard Law School and director of its Program on Corporate Governance, the Shareholder Rights Project works with seven large pension funds and a foundation to effect change at companies whose shares they own.
• Annual Elections for Corporate Boards: For or Against? Huffington Post, July 7, 2013
  Important developments were highlighted today by Gretchen Morgenson in The New York Timesabout “35 Big Steps To Accountability” in corporate board governance. According to her column, 35 additional companies have joined with the 42 that had already agreed with the Shareholder Rights Project (SRP) to reject staggered corporate board elections in favor of annual ones. The SRP is led by Harvard Law School Professor Lucian A. Bebchuk.
• Big investors should follow code of conduct, advocate says, Globe and Mail, June 18, 2013
  The world’’s largest investment funds – including pension plans and mutual funds – should adopt a code of conduct to ensure they will wield their growing power appropriately in a new “age of the institutional investor,” according to Stephen Davis, a leading governance advocate. … The Harvard University professor spoke Tuesday at the annual meeting of the Canadian Coalition for Good Governance (CCGG), telling Canada’s largest institutional investors that governments have increasingly shifted power to major investors in the hope they will police the capital markets.
• Law profs, ex-SEC chair protest CommonWealth arbitration bylaw, Reuters, June 12, 2013
  A group of 11 securities law professors, including Bernard Black of Northwestern, John Coates of Harvard and James Cox of Duke (the first three signatories), assert in a joint affidavit that mandatory arbitration of shareholder disputes would undermine U.S. capital markets. … Harvard Law professor Jesse Fried filed a separate affidavit because the other law professors distinguished the rights of shareholders who bought CommonWealth stock prior to the bylaw’s enactment from those who acquired shares with knowledge of the mandatory arbitration provision.
• Harvard Prof. Says SEC Can Require Political Donation Info, Corporate Counsel, June 4, 2013
  There is nothing in the Constitution—including the First Amendment—that bans the Securities and Exchange Commission from requiring public companies to disclose their spending on politics, according to Harvard law professor Lucian Bebchuk…. In a post on his Harvard law blog Monday, Bebchuk countered critics who oppose a petition [PDF] filed by him and eight other law professors asking the SEC to develop rules making public companies disclose their political spending. Bebchuk, along with Columbia associate law professor Robert Jackson Jr., co-chairs the group.
• C.E.O.’s Don’t Need to Earn Less. They Need to Sweat More, New York Times, May 29, 2013
  Most C.E.O.’s used to be able to handle their pay negotiations in private, but the Dodd-Frank reforms, which were passed in 2010, now give shareholders the right to vote on executive compensation. This has helped usher in a so-called “say on pay” revolution, which tries to stop executives from making more money when their companies don’t do that well …Lucian Bebchuk, a professor at Harvard Law School and perhaps the leading academic voice for corporate reform, told me that the problem isn’t (just) greed. It’s the boards of directors. The directors are supposed to represent the stockholders’ interests, he says, but most public firms, where C.E.O.’s can have considerable influence over board appointments, neuter those interests. They are structured so that a board tends to side with its chief.”
• Republicans alarmed over political spending plan, Wall Street Journal MarketWatch, May 16, 2013
  At issue is an SEC review of a petition filed by Harvard Law School Professor Lucian Bebchuk and other academics seeking mandatory disclosure of political spending. Bebchuk and a group of shareholder advocates and public pension funds are seeking to have the SEC adopt rules that would require public corporations to disclose information about their political spending.
• White to Republicans – SEC not writing political spending rule, Reuters, May 16, 2013
  The head of the U.S. Securities and Exchange Commission told lawmakers on Thursday that her agency, despite pressure from liberal groups, is not currently drafting a rule that would call for public companies to disclose their political spending. … The fifth commissioner, Democrat Elisse Walter, recently told reporters the issue was “not high” on the SEC’s rulemaking agenda, and she declined to offer an opinion on the substance of the proposal. … Still, Lucian Bebchuk, a professor at Harvard Law School and one of the principal drafters of the petition, said he is optimistic that it will prevail in the end.
• SEC pressed to abandon corporate political spending disclosures petition, The Washington Post, May 16, 2013
  During a three-hour hearing, lawmakers said they were disturbed to learn that the SEC is considering a petition that would require publicly traded companies to disclose their political contributions. … The professors who submitted the petition have noted that they did not agree on whether corporate political spending helped or hurt shareholders, but they all shared the view that public companies should not have free reign to spend their shareholders’ money on political communication without revealing what they’re doing. … One of the professors, Lucian Bebchuk of Harvard Law School, said the SEC would merely be doing its job if it adopted the disclosure rule, not playing politics.
• Op-Ed by Mark Roe: Brown-Vitter cannot fix US banks by itself, Financial Times, May 15, 2013
• Job Split Doesn’t Always Work Magic, Wall Street Journal, May 8, 2013
  A 2009 review of studies on independent chairmen by the Millstein Center for Corporate Governance and Performance concluded the impact on performance “was inconclusive,” said Stephen Davis, associate director of Harvard Law School’s programs on corporate governance and institutional investors, who helped oversee the review. … “It isn’t driven by research,” Mr. Davis said of the push to separate the top two jobs. “It’s driven by investors’ views about accountability.”
• As Companies Step Up Buybacks, Executives Benefit, Too, Wall Street Journal, May 5, 2013
  Researchers say companies that tie executive pay to per-share earnings are more likely to buy back stock. … But researchers are divided over whether that hurts investors. … “Just because these people are getting rich doing these repurchases, that doesn’t mean it’s bad for shareholders,” said Jesse Fried, a professor at Harvard Law School. Mr. Fried is a frequent critic of executive-pay schemes, but he said per-share earnings targets can be valuable.
• Editorial: SEC could lead on disclosure of campaign funds, The Sacramento Bee, April 28, 2013
  Oil companies, the chamber and other corporate interests have come out against an informed public. Specifically, they’re opposing a petition urging the Securities and Exchange Commission to develop a rule requiring that publicly traded corporations disclose their political donations. … Petitioners include deep thinkers such as law professors Lucian A. Bebchuk of Harvard and Robert Jackson of Columbia, who have led the effort, and advocates such as Public Citizen, which helped organize the petition drive. There also are thousands of investors who are trying to follow their conscience.
• Herbalife investors meet — briefly, Los Angeles Times, April 26, 2013
  Experts in corporate governance said Herbalife mangled an opportunity to soothe investors, who have seen its stock price pingpong as [Bill] Ackman and [Carl] Icahn made enormous, opposing wagers on the company’s future. … “If I’m a shareholder, I want to see a board that’s responsive and accountable and prepared to [address] any risks that face the company. That probably doesn’t translate into a 14-minute meeting,” said Stephen Davis, a senior fellow at the Harvard Law School Program on Corporate Governance.
• Boeing to Qualcomm Pressed to Reveal Secret Political Spending, Pension Funds Say,Businessweek, April 25, 2013
  Political-activity resolutions generated more shareholder votes last year than any other topic, including efforts to separate the roles of chief executive and chairman, according to a paper published this month in The Georgetown Law Journal by Lucian A. Bebchuk of Harvard Law School in Cambridge, Massachusetts and Robert J. Jackson Jr. of Columbia Law School in New York.
• Shareholder Loyalty Is A 2-Way Street, Pension Funds Say, Law360, April 24, 2013
  Executives at Dutch pension fund manager PGGM Investments and Britain’s RPMI Railpen Investments, which control about $200 billion in retirement investments, want to see more engagement from independent directors — those not holding executive positions at the companies they oversee — to “create a culture of no surprises.” … Writing in a blog post for Harvard Law School’s corporate governance program, the executives said some boards do solicit input before proxy battles erupt, an “encouraging” sign. But that’s not the norm, and the two pension funds said many boards scrape by with the bare minimum — federally required disclosure statements.
• Op-Ed by Mark Roe: Apple’s Cash-Flow Problem, Project Syndicate, April 18, 2013
• Group Tells White to Make Issuer Disclosure Of Political Spending Her First Priority at SEC, Bureau of National Affairs, April 17, 2013
  In a telephone conference with reporters, Liz Kennedy, counsel at CRC member Demos, noted that American investors and the public have submitted more than 500,000 comments in support of a rulemaking petition calling on the SEC to require the disclosures. … The rulemaking petition in question was submitted to the SEC in August 2011 by the Committee on Disclosure of Corporate Political Spending, a group comprising securities and corporate law professors co-chaired by Harvard Law professor Lucian Bebchuk and Columbia Law School professor Robert J. Jackson Jr. (153 SLD, 8/9/11).
• Harvard Study: Boards, Not Shareholders, Are Short-Term Thinkers, aiCIO, April 17, 2013
  The Chinese Wall between boards and shareholders that some corporations believe leads to long-term value serves the opposite end, according to a paper. … Lucian Bebchuk, the director of Harvard Law School’s corporate governance program, has published an exhaustive study and literature review on the argument for board insulation. His conclusion: it’s utter baloney.
• Corporate governance case study: AIG and the business judgment rule, Thomson Reuters, April 8, 2013
  In an appendix to the motion, AIG included an unredacted version of the letter sent to Starr after the board’s vote in January by the directors’ outside law firms, Seitz Ross Aronstam & Moritz and Simpson Thacher & Bartlett. The letter detailed the board’s four-month process for considering Starr’s claims, which included obtaining expert opinions from Harvard Law professor John Coates and University of Califronia Irvine Law School Dean Erwin Chemerinsky.
• Ex-Commissioner Calls for Overhaul Of SEC Shareholder Proposal Process, Bureau of National Affairs, April 8, 2013
  Harvard law professor and corporate governance expert Lucian Bebchuk–who works with institutional investors to submit shareholder resolutions … described shareholder proposals as an “useful and important” governance tool. He added that widely-accepted reforms and arrangements were sparked by such resolutions.
• At Banks, Board Pay Soars Amid Cutbacks, New York Times DealBook, March 31, 2013
  Since the financial crisis, compensation for the directors of the nation’s biggest banks has continued to rise even as the banks themselves, facing difficult markets and regulatory pressures, are reining in bonuses and pay. … “While the Goldman pay is high, the directors are paid all in equity that cannot be cashed until they leave the board,” added Lucian A. Bebchuk, a professor at Harvard Law School. “These features are beneficial for shareholders but reduce the value of the compensation for the directors.”
• Short-Term Shareholders Aren’t Looking Out For The Long Term, And Vice Versa, Dealbreaker, March 28, 2013
  Yesterday we talked a little about Dell and its vague desire to escape the short-term obsessions of the public equity market yesterday. Today I came upon this new paper by Harvard Law professor Jesse Fried, about how long-term shareholders are really just as bad as the short-term ones. The argument is: companies like to talk about favoring long-term shareholders over short-term ones, because they think (er, say) that short-term shareholders want things (slashing R&D, earnings manipulation) that reduce the overall economic value of the firm, while long-termers only want to grow its value, but in fact long-term shareholders also want things that reduce the overall economic value of the firm, so maybe favoring the long-term isn’t as good an idea as people think.
• Op-Ed by Mark Roe: London Whale is the cost of too big to fail, Financial Times, March 24, 2013
• Fed pushes banks to ignore rivals when setting bonuses, Reuters, March 22, 2013
  The Federal Reserve is pushing banks to ignore competitors’ performance when awarding bonuses, and focus squarely on their own profitability, according to pay consultants and other people familiar with the matter. … Proponents of relative value metrics say that the measures prevent executives from getting bonuses simply because the economy is growing. “I remain a strong supporter of relative performance over absolute performance,” said Lucian Bebchuk, a professor at Harvard Law School who focuses on compensation and corporate governance. Bebchuk advised pay czar Kenneth Feinberg when the latter was charged with keeping bonuses in check at bailed-out banks. “Absolute performance rewards managers for improvements that are not due to their own performance,” he said, adding that “when the sector as a whole does not do well, absolute performance might well fail to reward those executives who do relatively well.”
• Teva Investors File Suit to Seek Management Pay Details, Bloomberg, March 18, 2013
  Remuneration for each executive should still be reported because both U.S. and Israeli rules require the breakouts for domestically listed companies, the investors said, citing the support of Jesse Fried, a Harvard Law School professor and co- author of “Pay Without Performance: The Unfulfilled Promise of Executive Compensation.”
• Season’s greetings, Breakingviews, March 17, 2013
  Proxy advisers and advocates like Harvard Law School’s Shareholder Rights Project have boosted their influence, too. So far in 2013, all six Harvard project-backed proposals to eliminate staggered boards have passed overwhelmingly.
• Should Canada adopt Switzerland’s limits on corporate pay?, The Globe and Mail, March 11, 2013
  The fussing about executive compensation has been fulminating for quite some time. Professor Lucian Bebchuk, the economics guru at Harvard, kicked off his provocative research a decade ago by describing managers as “rent extractors” who have the power to influence their own pay.
• On Executive Comp, the Swiss Aren’t Neutral — Will the U.S. Be Persuaded?, TIME, March 7, 2013
  [D]espite an on-going debate in America over growing income inequality and exorbitant CEO compensations, analysts say that Swiss-like change – if it sweeps the U.S. at all – will not happen overnight. […] This analysis strikes a chord with Stephen Davis, Associate Director of Harvard Law School Programs on Corporate Governance and Institutional Investors. “The vote will be seen as a warning signal to US boardrooms, but the odds of binding votes on pay are remote.”
• Op-Ed by Mark Roe: Are Stock Markets Really Becoming More Short Term?, Project Syndicate, February 21, 2013
• Shareholders question corporate political spending, Wall Street Journal MarketWatch, February 7, 2013
  The [Securities and Exchange Commission] said last month that it plans to announce a rule proposal in April requiring public companies to disclose their spending on politics … “Because the interests of managers and investors often diverge when it comes to political spending,” Harvard Law’s Lucian Bebchuk and Columbia Law’s Robert Jackson said in a blog post welcoming the SEC announcement, “disclosure is necessary to ensure that insiders are held accountable when they decide to spend investors’ funds on politics.”
• Op-Ed by Lucian Bebchuk: Don’t Make Poison Pills More Deadly, New York Times DealBook, February 07, 2013
• Z Capital angles for control of casino operator Affinity, Thomson Reuters, February 5, 2013
  Lucian Bebchuk, who directs Harvard Law’s corporate governance program, said the new provisions sound like “serious departures” from good governance.[…]”Especially troubling are the provisions denying shareholders any right to vote on fundamental changes such as a merger,” Bebchuk told Reuters on Monday.
• Security Detail Protects NYSE Deal, Wall Street Journal, January 30, 2013
  When IntercontinentalExchange Inc. ICE -0.35% announced an $8.2 billion deal for NYSE Euronext, observers speculated other suitors could follow due to the exchange industry’s recent history. […] Court rulings generally say an agreement that makes business sense for the seller, and its shareholders, is allowable, says Harvard Law School professor John C. Coates, a former M&A lawyer. “Delaware law is always a mixture of effects and motives,” he said.
• Fewer shareholder proposals, greater board outreach seen, Pensions & Investments, January 21, 2013
  “Right now, the biggest shareholder proposal campaign we are looking at by far” this year is the one led by Lucian Arye Bebchuk, professor of law, economics and finance at Harvard Law School, Cambridge, Mass., said Mr. McGurn. Mr. Bebchuk leads the campaign as part of the Shareholder Rights Project he directs.
• Group Applauds SEC for Movement On Corporate Political Spending Issue, Bureau of National Affairs, January 14, 2013
  During the CRC press call, coalition members told reporters that it is unusual for the SEC to state in its regulatory agenda that it is considering acting on a rulemaking petition. They said that sends a strong signal that the commission intends to move forward on the matter. “I’m quite optimistic that the SEC consideration will result in the issuance of a proposed rule this year,” said Harvard Law professor Lucian Bebchuk, co-chair of the Committee on Disclosure of Corporate Political Spending.
• What’s behind all the corporate secrecy over political spending?, Fortune, January 9, 2013
  When it comes to spotty disclosure, Aetna and Qualcomm have a fair amount of company. A paper by law professors Lucian Bebchuk at Harvard and Rob Jackson at Columbia includes the 2012 example of “Boeing’s voluntary report [which] excluded a $200,000 in-kind contribution to a third-party group.”
• SEC Moves to Require That Corporations Disclose All Political Spending, Truthout, January 8, 2013
  “I am delighted that the Division of Corporation Finance will be considering this year whether to recommend that the SEC issue a proposed rule for corporate political spending as our rulemaking petition urged,” said Lucian Bebchuk, Director of the Program on Corporate Governance at Harvard law School who co-chaired the committee on disclosure of political spending.
• Campaign finance fight lands at the SEC’s door, Politico, January 8, 2013
  Coming off the most expensive election in the country’s history, the Securities and Exchange Commission is weighing a move to force public companies to stop hiding their political spending of shareholders’ dollars. […] The push to require more disclosure began in August 2011 when a group headed by Harvard Law professor Lucian Bebchuk and Columbia Law School professor Robert J. Jackson, Jr. petitioned the agency to put a rule in place.
• Fund Files Novel Suit in Delaware to Inspect Qualcomm Records on Political Expenditures, Bureau of National Affairs, January 7, 2013
  The rulemaking petition thus far has resulted in more than 320,000 comments, the overwhelming majority by shareholders voicing support for mandated disclosures. In response to the large number of comments, the SEC’s Division of Corporation Finance currently is considering whether to recommend that the commission move forward with the rulemaking (44 SRLR 2072, 11/12/12) […] Harvard Law professor Lucian Bebchuk, co-chair of the Committee on Disclosure of Corporate Political Spending, Jan. 4 told BNA that the New York state fund’s lawsuit is “yet another manifestation” of investors’ strong interest in how companies spend their resources on political activities.