Sky Blog
The world of corporate governance is undergoing two intense, inter-related debates. One is a debate as to whether profit-maximization in the short term is really different from profit-maximization in the long term, and if so whether American corporations are currently …
Many prominent business executives and legal scholars are convinced that the American economy will suffer unless hedge fund activism with its perceived “short-termism” agenda is significantly restricted. Conversely, shareholder activists and their proponents claim they function as a “disciplinary mechanism” …
The hedge fund industry in the United States has evolved from a niche market participant in the early 1950s to a major industry operating in international financial markets today. Hedge funds in the United States were originally privately-held, privately-managed investment …
A January 2016 study, Short-Term Investors, Long-Term Investments, and Firm Value, by Martijn Cremers, Ankur Pareek and Zacharias Sautner, provides substantial “empirical” evidence for the fact that, in the current corporate governance environment, short-term investors possess the undue …
The message of the Dow/DuPont merger and split up is simple: No firm is today “too big to target.” Activists can see the transaction as evidence that, even in the rare case where they lose a proxy fight (as they …
Ethan Allen and its management prevailed a few weeks ago against an intense hedge fund activist campaign to remove its entire board of directors.
An analyst of one of our larger shareholders, the Gabelli funds, observed “I’ve never seen a …
Since the late 1990s, activist hedge funds have become the dominant face of shareholder activism, essentially taking over an arena that was once dominated by pension funds and mutual funds. Hedge fund activism (HFA) has attracted substantial public attention because …
Recent econometric studies (“empirical evidence”) definitively rebut the position taken by the Harvard Law School Shareholder Rights Project (SRP) that classified boards are associated with lower firm value and inferior outcomes for shareholders. After correcting serious statistical and econometrical flaws…
There is a frenzied rush for shareholders to get a new ‘right”, the right to put up their own nominees for board membership. Boards of directors, so goes a dominant opinion, are not to be fully trusted to pick the …
This is the heyday of institutional investor activism in proxy contests. Insurgents are running more slates and targeting larger companies. They are also enjoying a higher rate of success: 66% of proxy contexts this year have been at least partially …