An article in today’s Wall Street Journal, “Wrong Way? Street Signs Point to Speed,” contained some data that does much to explain the current problems with corporate governance: According to Sanford C. Bernstein chief investment officer Vadim Zlotnikov, the average holding period for stocks on the New York Stock Exchange and American Stock Exchange last […]
Read more...A good piece in today’s Wall Street Journal, “Shareholders Push for Vote on Executive Pay,”recounts the efforts of major institutional investors to exert pressure against excessive CEO pay via non-binding shareholder resolutions. UK funds have been in the forefront of this effort, because similar regulations are already in force there. Although the UK rules have […]
Read more...Those of you who live in New York City doubtless recall how Mayor Rudolph Giuliani initially secured his reputation. The city was perceived to be out of control. Crimes, petty and not so petty, were rampant. Most people felt a bit anxious on the street at night. Couples, once they had children, decamped to the […]
Read more...The open question is whether this is good news or bad news. Fannie Mae’s decision to cancel $44.4 million in top officer bonuses for 2001 through 2003 because they were based on earnings overstatments produced by violations of accounting rules is unquestionably the right thing to do. No one should profit from a fraud they […]
Read more...This post on Thomas Palley’s blog, which I found thanks to Mark Thoma’s Economist’s View, argues cogently for an expansion, rather than a rollback, of Sarbanes-Oxley, the corporate governance reforms implemented in 2002 in the wake of big corporate accounting scandals, such as Enron and WorldCom. Palley, an economist, observes that Sarbox has not stopped […]
Read more...Funny how one man’s shareholder activism is another man’s shareholder democracy. As we’ve discussed, and as is probably evident to any reader of the Wall Street Journal, the corporate establishment has long been demonizing shareholder activists (ah, those long haired rebels!) of all sorts. Before, the Business Roundtable and the Chamber of Commerce lambasted environmental […]
Read more...Dealbreaker.com has been on top of the latest developments in the Enron case, namely that CEO Jeff Skilling’s sentence may be reduced from 24 years to six months (!) and that the Justice Department has decided not to appeal a Fifth Circuit appeals court decision overturning most of the conviction of Merrill Lynch investment bankers. […]
Read more...No, I am not talking about rendition or signing statements or warrantless wiretapping of American citizens. I am concerned about the fact it has become acceptable for corporations to welsh on their agreements. Exhibit 1: a page one story in yesterday’s Wall Street Journal, “Fights Over Health Claims Spawn a New Arms Race.” The article […]
Read more...Doug Smith, in his post “Putting Shareholders First? Wrong!” at StrategyWorld makes a persuasive case that companies can’t put the interests of shareholder values above other considerations if they are to do more than engage in a Potemkin-village version of corporate social responsibility. He focuses on the tendency to give shareholder concerns primacy, rather than […]
Read more...Maybe it’s just coincidence, but there seems to be a run of particularly good humorous posts on finance-related matters. This one, “Adjusted GPA on a Pro Forma Basis,” from Long or Short Capital, is on the desirability of students learning to misreport, ummm, manipulate, ummm, position data, via how they present their GPAs on their […]
Read more...For those readers who live outside New York City, the dramatis personae are Gretchen Morgenson, who writes a weekly column in the New York Times’ Sunday business section that regularly anatomizes the ways that CEOs enrich themselves, and Martin Lipton, who along with Joseph Flom was one of the top M&A lawyers in the 1980s, […]
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