Study: CEO Pay Rise is Attributable to Company Size

A new study concludes that the rise in CEO pay is attributable to market capitalization. Of course, it is supposed to be attributable to performance. So what we learn from this is that there is a perverse incentive for CEOs to make companies bigger instead of better. In recent decades at least, the size of…

Economists Comment to SEC Proposal on Proxy Advisors

On January 15, a group of over 60 leading finance professors from major American universities filed the following comment to the SEC to ask a revision of the proposed draft regulation: Dear Chairman Clayton and Members of the Commission: We share the Commission’s concerns about concentration in the proxy advisory market. Yet, we disagree with…

Blackrock’s Larry Fink: Letter to CEOs

Blackrock’s Larry Fink wrote to the portfolio company CEOs to tell them that investors insist on more from them when it comes to climate change, from disclosure to strategy. Bottom line (literally): “Climate risk is investment risk.” Here is the letter: Dear CEO, As an asset manager, BlackRock invests on behalf of others, and I…

Corporate Law for Good People

A new paper by Yuval Feldman, Adi Libson, and Gideon Parchomovsky concludes that “good” behavior First, it exposes potential ethical blind-spots in which wrongdoing by ‘good people’ might be far more prevalent than previously assumed and conventional corporate governance does not address. Second, it suggests novel corporate governance interventions supported by behavioral ethics to address…

Proxy Season 2020: Board Composition, Climate, Political Contributions

In a report released today, The Conference Board finds that the environmental and social policies of corporations will continue to take center stage in the 2020 shareholder voting season. Institutional investors will continue to focus on issues pertaining to board diversity, disparities in the compensation of female employees, and transparency around corporate political activities. Conducted…

Nell Minow Debates Proposed SEC Rules on Proxy Advisors

On January 13, 2020, at the Stigler Center for the Study of Economy and the State, VEA Vice Chair Nell Minow debated University of Chicago professor Steven Kaplan on the new SEC proposed rules on proxy advisory firms, moderated by Luigi Zingales.

Changing the Timeline on Corporate Financial Reporting: SGX Scraps Quarterly Updates – Glass Lewis

he Singapore Exchange Limited (“SGX”) announced that it would change its reporting regimen to remove the requirement for quarterly earnings reporting to instead only require half-yearly reporting. The change provides for risk-based exceptions, which require certain companies to continue quarterly earnings reports if: A company received a disclaimer, adverse or qualified opinion from its auditor…

Diversity Confirmed To Boost Innovation And Financial Results

“Diverse and inclusive cultures are providing companies with a competitive edge over their peers.” This quote summarizes conclusions from The Wall Street Journal’s first corporate ranking that examined diversity and inclusion among S&P 500 companies. The Journal’s researchers’ work joins an ever-growing list of studies by economists, demographers, and research firms confirming that socially diverse…

BlackRock’s Larry Fink: Climate change risk worse than Great Recession

BlackRock Chairman and CEO Larry Fink is warning that the financial risks of climate change are bigger than any crisis he’s experienced in his career on Wall Street. “We don’t have a Federal Reserve to stabilize the world like in the five or six financial crises that occurred during my 40 years in finance,” the…