Entrenchment or Efficiency? CEO-to-Employee Pay Ratio and the Cost of Debt

By Katsiaryna Salavei Bardos, Steven Kozlowski and Michael Puleo June 30, 2021 by renholding

Critics have argued that the rule requiring companies to disclose the ratio of CEO compensation to employee pay is too expensive and time consuming, with the U.S. Chamber of Commerce estimating the cost to U.S. companies at more than $700 …

SEC Chair Gensler Speaks at London City Week

By Gary Gensler June 30, 2021 by renholding

I’m honored to be speaking again at London City Week. It’s been eight years since I last spoke here. That was about benchmark interest rates and the London Interbank Offered Rate (LIBOR). I may come back to that, but I’m

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The Impact of Mandatory Gender Pay Gap Disclosure in the UK

By Aneesh Raghunandan and Shivaram Rajgopal June 29, 2021 by renholding

Firms are coming under increasing pressure to close and disclose their gender pay gaps. The pressure stems from several sources, including, (i) socially conscious investors; (ii) interest groups advocating the incorporation of ESG factors into corporate decision-making and stakeholder capitalism …

SEC Commissioner Lee Addresses Climate, ESG, and Boards of Directors

By Allison Herren Lee June 29, 2021 by renholding

“You Cannot Direct the Wind, But You Can Adjust Your Sails”[1]

Good morning and thank you for the invitation to speak today at the Society for Corporate Governance 2021 National Conference. I’m impressed with your full and informative agenda

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The Importance of Context for Numbers in Earnings Conference Calls

By Kris Allee, Chuong Do and Huy Do June 28, 2021 by renholding

Numbers generally convey a sense of certainty – especially in accounting and finance. However, this perceived precision also makes it easier to use them in misleading ways. An extensive literature in political science and mass communications discusses how numbers, taken …

Wachtell Lipton Discusses Key Corporate Governance Issues for Mid-Year 2021

By Martin Lipton, Steven A. Rosenblum and Karessa L. Cain June 28, 2021 by renholding

Last year, we did a mid-year edition of our annual Thoughts for Boards of Directors to highlight key issues and considerations in managing the challenging business environment and profound upheaval caused by the pandemic. Many of these issues are still …

The Fiduciary Principle and the Best Interests of Average Retail Investors

By Joseph A. Franco June 25, 2021 by renholding

The Securities and Exchange Commission recently offered a full-throated explication of its premise that investment advisers are subject to a federally imposed fiduciary standard under the Investment Advisers Act (IAA).[1] The premise, grounded in cryptic Supreme Court dicta, served …

Improving the SEC’s Best Execution Rule

By Chester S. Spatt June 24, 2021 by renholding

The nature of Best Execution responsibilities of market participants has been surprisingly complex in light of the evolution of trading technology and our regulatory system. My remarks highlight several facets: the NBBO, Regulation NMS and the trade-through rule, fees and …

Arnold & Porter Discusses Congressional Antitrust Reform Targeting Big Tech

By Debbie Feinstein, C. Scott Lent and Gregory M. Louer June 24, 2021 by renholding

Senior congressional antitrust leaders on both sides of the Capitol are taking steps to transition a long-running investigation into competition practices in the technology sector into legislative action. Activity kicked off on Friday, June 11, when the House Judiciary Committee’s …

Mergers, Antitrust, and the Interplay of Entrepreneurial Activity and the Investments That Fund It

By Gary Dushnitsky and D. Daniel Sokol June 23, 2021 by renholding

Antitrust is in the news to an extent that it has not been for a generation. Senator Klobuchar (CALERA), senators Lee and Grassley (TEAMS Act), and, in a series of bi-partisan bills, various members of the House of Representatives all …

SEC Commissioner Asks Whether Agency Can Make Sustainable ESG Rules

By Elad L. Roisman June 23, 2021 by renholding

Thank you Gary [LaBranche] and the National Investor Relations Institute for inviting me to speak at your 2021 Virtual Conference. Of course, I will clarify up front that the views I express are my own and do not necessarily reflect

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Stock Market Value and Deal Value in Appraisal Proceedings

By Robert T. Miller June 22, 2021 by renholding

In a new article, I consider two methods of valuing public companies in appraisal proceedings under Section 262 of the Delaware General Corporation Law: the unaffected market price of the company’s shares and the deal price (less synergies, as applicable) …

Paul Weiss Discusses SEC Move to Consider ESG Disclosures

By Daniel J. Kramer, David S. Huntington, Mark S. Bergman, Brad S. Karp and Audra J. Soloway June 22, 2021 by renholding

The SEC recently closed its period of public comment on the topic of climate-change disclosures after receiving hundreds of submissions. The comments, not surprisingly, reflected a range of views regarding climate-related disclosures, including whether the SEC should or must limit …

The SEC’s Regulation of ESG Disclosures

By David A. Katz and Laura A. McIntosh June 21, 2021 by renholding

The U.S. Securities and Exchange Commission has indicated that ESG disclosure regulation will be a central focus of recently confirmed SEC Chair Gary Gensler’s tenure. At the top of the agenda is climate change disclosure, and the Commission is taking …

ISS Discusses How ESG Investing Stands Up to the Critics

By Duncan Paterson, Anthony Campagna and Meagan Rossi June 21, 2021 by renholding

There is a quote that is commonly misattributed to Mahatma Gandhi: “First they ignore you, then they laugh at you, then they fight you, then you win.”

At the regular get-togethers in the responsible investment industry, war stories are frequently …

ESG and the Pricing of IPOs: Does Sustainability Matter?

By Alessandro Fenili and Carlo Raimondo June 18, 2021 by renholding

In recent years, investors and others in the financial community have devoted increasing attention to the role of sustainability in financial markets and the economy at large. Sustainability is now seen as an alternative form of risk management, a way …

Are Earnings Announcements More Useful than Other News for IPO Pricing?

By Ivy Zhang, Yong Zhang and Xiaoxu Ling June 17, 2021 by renholding

We study the relative usefulness of earnings announcements for valuation from the perspective of information externalities: the use of industry peer information for valuation, particularly for IPO pricing. Externalities of accounting information are one of the primary justifications for disclosure …

SEC Commissioners Comment on Chair Gensler’s Regulatory Agenda

By Hester M. Peirce and Elad L. Roisman June 17, 2021 by renholding

Last Friday, the Office of Information and Regulatory Affairs released the Spring 2021 Unified Agenda of Regulatory and Deregulatory Action (“Agenda”), which includes the SEC Chair’s Agenda.[1] While there are important and timely items on the list, including rules

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Is the Quality of Law in the Eye of the Beholder?

By Gerhard Schnyder, Kun Fu, Anna Grosman, Mathias Siems and Ruth V. Aguilera June 16, 2021 by renholding

Millions of dollars are spent every year by international financial institutions and development agencies to promote legal reforms in countries around the world. Indeed, since the late 1990s, legal reforms have become a key tool for trying to promote …

Cleary Gottlieb Discusses New York’s New Antitrust Law

By Cleary Gottlieb Steen & Hamilton June 16, 2021 by renholding

The New York state Senate has passed the “Twenty-First Century Antitrust Act” (S. 933) to amend its state antitrust law, radically changing the risks of doing business in New York. It ostensibly aims at so-called “Big Tech,” but applies to …

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The CLS Blue Sky Blog

Columbia Law School's Blog on Corporations and the Capital Markets

June 2021