The following op-ed by Professor Lucian Bebchuk, Investors must have power, not just figures on pay, was published in The Financial Times on July 28, 2006: The US Securities and Exchange Commission’s vote this week to expand disclosure requirements for executive pay is a major step forward.
The Delaware Chancery Court issued a decision in the litigation initiated by Professor Lucian Bebchuk against CA Inc. The decision forced CA to withdraw its plan to exclude Bebchuk’s poison pill proposal from the corporate ballot and opens the door to shareholder voting on such proposals in other companies.
In its annual meeting this spring, the American Law and Economics Association elected Professor Lucian Bebchuk as its Vice-President/ President-Elect. He will serve as vice-president until the Association’s annual meeting next spring when he will assume the Association’s presidency for one year.
Three major U.S. corporations — AIG, Bristol-Myers Squibb and Time-Warner — recently amended their corporate by-laws in response to stockholder proposals submitted by Professor Lucian Bebchuk.
Investors should applaud the SEC’s vote yesterday to propose an expansion in disclosure requirements for executive pay. While there is room for reasonable disagreement on the merits of prevailing pay arrangements, there can be little disagreement on the quality of disclosure practices. These are highly inadequate.
Lucian Bebchuk, director of HLS’s Program on Corporate Governance, was named as one of this year’s “100 most influential people in finance” by Treasury and Risk Management magazine. The list recognizes leaders in corporate finance, ranging from CEOs to regulators to academics.
Professor Lucian Bebchuk, director of the HLS Program on Corporate Governance, recently delivered the John R. Raben Fellowship Lecture at Yale University. The lecture was based on a working paper titled “The Myth of the Shareholder Franchise,” in which Bebchuk argues that shareholders rarely, if ever, successfully vote to replace the board of a public company.
On Friday, Novemeber 4, The Program on Corporate Governance at HLS will host a panel discussion to debate personal liability for corporate directors. This question became a central one in the recent WorldCom and Enron cases, in which directors paid settlement fees out of their own pockets. Panelists will consider whether personal liability makes directors accountable, or whether it could deter directors from serving and make serving directors excessively defensive.
“Excessive pay isn’t the only cost of flawed compensation arrangements. Executives’ influence over their boards has produced pay arrangements that dilute and sometimes pervert incentives. Though the need to provide executives with adequate incentives is often given as the reason for the escalation of pay levels during the past decade, pay is much less linked […]
“Talking to terrorists is different from giving in to them. Sometimes it may be good practice to know what they are thinking, or, as a line in ‘The Godfather’ goes, it is important to ‘keep your friends close but your enemies closer.’ FBI and police hostage negotiators nearly always negotiate with hostage-takers–to gather information, to […]