How Does Corporate Ownership Affect Employee Compensation?

By Claudine Gartenberg and Elaine Pak October 18, 2023 by renholding

Over the past 30 years, private equity firms and hedge funds have reshaped the landscape of corporate ownership. By 2022, firms under private equity management employed over 11 million people, nearly 10 percent of the U.S. workforce, while, in 2021, …

SEC Chair Gensler Speaks on Clawbacks of Erroneously Awarded Compensation

By Gary Gensler October 18, 2021 by renholding

I support today’s [October 14] action to re-open comment on the Dodd-Frank Act rule regarding clawbacks of erroneously awarded incentive-based compensation. I believe we have an opportunity to strengthen the transparency and quality of corporate financial statements as well as

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Cahill Gordon Discusses Glass Lewis and ISS 2020 Voting Guidelines

By Helene R. Banks, Geoffrey E. Liebmann, Ross Sturman, Joseph E. Cho and Tina M. Davis December 10, 2019 by renholding

Both Glass, Lewis & Co. (“Glass Lewis”) and Institutional Shareholder Services Inc. (“ISS”), the leading providers of corporate governance and proxy advisory services, have now published their 2020 proxy voting guidelines. The Glass Lewis guidelines[1] will take effect for …

Wachtell Lipton Discusses 2020 Voting Policies from ISS and Glass Lewis

By Andrew R. Brownstein, Sabastian V. Niles, Andrea K. Wahlquist and Carmen X.W. Lu November 15, 2019 by renholding

Proxy advisory firms Institutional Shareholder Services (ISS) and Glass Lewis recently announced updates to their U.S. proxy voting policies for the 2020 proxy season. ISS’s new policies will apply to shareholder meetings held on or after February 1, 2020 and …

Exequity Discusses Valuing Amazon

By Ben Burney October 29, 2019 by renholding

It is widely accepted among investors that compensation committees should align executive pay with performance in part by using incentive metrics that contribute directly to shareholder value. For this reason, it is common for incentive metrics to overlap with performance …

ISS Offers 2019 Global Policy Survey Results

By Institutional Shareholder Services September 25, 2019 by renholding

Key Findings

Board Gender Diversity: Majorities of both investors (61 percent) and non-investors (55 percent) agreed with the view that board gender diversity is an essential attribute of effective board governance regardless of the company or its market. Approximately 27

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Nuveen Offers 2019 Proxy Season in Review

By Peter Reali and Anthony Garcia September 9, 2019 by renholding

The 2019 proxy season was marked by an increased willingness among shareholders to hold boards accountable on director elections, say- on-pay, and environmental, social and governance (ESG) shareholder proposals. For example, almost 5 percent of directors received less than 80 …

How Rank and File Equity Compensation Affects Earnings Management

By Kip Holderness, Adrienna A. Huffman and Melissa F. Lewis-Western August 23, 2019 by renholding

Equity compensation is a beneficial tool when it motivates employees to engage more intensely in performance-enhancing activities. One negative consequence of equity compensation, however, is that it provides incentives to manage earnings (i.e., to strategically present financial reports or structure …

Does Gender Diversity Make a Difference in the Boardroom?

By Vikram K. Nanda, Andrew K. Prevost and Arun Upadhyay June 3, 2019 by renholding

Gender diversity on boards is a leading issue in corporate governance, as has been made clear by anecdotal evidence that associates board gender diversity with better boardroom practices (e.g., Credit Suisse Research Institute, 2016 [1]; Morgan Stanley Research, 2018 [2]) …

ISS Discusses Trends in 2019 U.S. Executive Compensation

By John Roe and Kosmas Papadopoulos April 16, 2019 by renholding

As we enter the peak of proxy season, we review executive compensation trends in the U.S. based executive pay disclosures so far this year. Our key findings include:

Compensation disclosures so far suggest continued increases in CEO pay across all

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How Workers As Directors Affect Tax Aggressiveness, Earnings Management

By Cristi A. Gleason, Sascha Kieback, Martin Thomsen and Christoph Watrin March 26, 2019 by renholding

Employee participation in corporate decision-making is a trending issue for politicians on both sides of the pond. In the U.S. and the UK, politicians and the popular press are debating whether assigning board seats to workers by law could be …

Top Executives’ Compensation and Firm Survival

By Dimitrios Gounopoulos, Georgios Loukopoulos and Panagiotis Loukopoulos March 7, 2019 by renholding

Executive compensation elicits strong opinions from shareholders, practitioners, and the public alike. Ideally, compensation packages should be designed to attract, retain, and motivate executives to perform in accordance with the objectives of their companies’ shareholders. This idea is consistent with …

Is It Time to Get Rid of Earnings-per-Share?

By Heitor Almeida January 8, 2019 by renholding

Do U.S. companies focus too much on short-term profits at the expense of long-term investments, profits, and growth? There is considerable debate among academics, practitioners, and politicians about the relevance of short-termism, its possible sources, and potential mechanisms to mitigate …

Wachtell Lipton Offers Thoughts for Boards of Directors in 2019

By Martin Lipton, Steven A. Rosenblum, Karessa L. Cain, Amanda S. Blackett and Kathleen C. Iannone December 20, 2018 by renholding

In recent years, it has become increasingly evident that the activism-driven corporate world is relatively fragile and is proving to be unsustainable, particularly when viewed in the broader context of rapidly changing political and social norms and increasing divisiveness across …

Wachtell Lipton Puts a Spotlight on Boards

By Martin Lipton December 3, 2018 by renholding

The ever-evolving challenges facing corporate boards prompt an updated snapshot of what is expected from the board of directors of a major public company—not just the legal rules, but also the aspirational “best practices” that have come to have equivalent …

The Transatlantic Debate over Shareholder Rights

By Maria Lucia Passador November 9, 2018 by renholding

Effective and sustainable shareholder engagement is a cornerstone of the corporate governance model of listed companies, which is based on a system of checks and balances among boards, management, and stakeholders. Enhancing the involvement of shareholders in corporate governance is …

Director Compensation and Related Party Transactions

By Ole-Kristian Hope, Ross (Haihao) Lu and Sasan Saiy October 4, 2018 by renholding

Related party transactions (RPTs) involve the transfer of resources, services, or obligations between a reporting company under the Securities Exchange Act and a related party (SFAS 57; IAS 24). Some of the highest profile accounting scandals, such as the ones …

How Equitable Pay Can Affect Firm Performance

By Hamilton Elkins July 31, 2018 by renholding

Much of the discourse on income inequality between ordinary workers and top executives concentrates on a ratio of chief executive officer (CEO) compensation to average employee compensation. The business strategy, organizational structure, and size of a firm can influence the …

The Consequences of Strong v. Weak Clawback Provisions

By Michael H.R. Erkens and Ying Gan July 18, 2018 by renholding

Clawback provisions authorize firms to recoup compensation from executives upon the occurrence of financial restatements or executive misbehavior. The first clawback provision in U.S. federal law was Section 304 of the Sarbanes-Oxley Act of 2002 (SOX 304). SOX 304 requires …

How Non-Compete Agreements Affect CEO Mobility, Job Security, and Compensation

By Omesh Kini, Ryan Williams and Sirui Yin June 19, 2018 by renholding

Firms generate profits through investments in physical and human capital. In legal regimes that recognize property rights, the firm generally has full ownership over its physical capital, as well as the right to future cash flows generated by these assets. …

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The CLS Blue Sky Blog

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

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