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Posts tagged “investor relations”

Merger objection lawsuits getting tougher for plaintiffs’ attorneys

The easy money business of merger and acquisition lawsuits may be getting more difficult for the plaintiffs’ law firms that specialize in these questionable class actions, according to new data from Cornerstone Research* and some recent legal decisions.

In the nearly three years since the Delaware Court of Chancery first signaled its hostility to the proliferation of so-called disclosure-only merger lawsuits (culminating in the landmark In re Trulia, Inc. Stockholder Litigation decision), the sector has undergone considerable turmoil. (See my previous blog post.)

In 2015, the first year impacted by the Delaware court’s change of heart, the percentage of M&A deals valued at more than $100 million that attracted shareholder lawsuits dropped to 84 percent from the…

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What can investor relations do about stock market volatility?

The market has been incredibly volatile in recent months, with some market moves of 200 to 400 points (close to 2 percent) on the Dow Jones Industrial Average. This is against the background of highly business-friendly tax reform, which is expected to boost reported earnings and cash flow in 2018.

Stock market analysts attribute these almost daily market gyrations to the uncertainty over the impact on American business of tariffs on steel and aluminum from China and some other countries, excluding Canada and Mexico. Other tariffs are threatened by the Trump Administration on a wide range of products, impacting an estimated $50 billion in trade. Indeed, in recent tweets and comments, President Trump has indicated that if China continues to unfairly inhibit U.S.…

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CEO pay ratio: more than just an SEC disclosure

As part of the 2010 Dodd-Frank Act, Securities and Exchange Commission (SEC) regulations now require public companies to include a CEO pay ratio disclosure in their proxy statements (or in the Form 10-K for companies that do not file a proxy statement). The disclosure requirements include: the annual compensation of the CEO, the median annual compensation of all employees (excluding CEO), and the ratio between the two amounts. With the 2018 proxy season in full swing, this issue is gaining traction and attention with investors, employees, media, social media, etc.

In its recent CEO Pay Ratio Survey of 365 public companies, intelligence firm Equilar found that 356 participating companies plan to report a median CEO Pay Ratio of 140:1 in their 2018 proxy statements.…

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Will focus on gender diversity on the Board lead to gender parity?

Much more than an emerging trend, increasing diversity on Boards of Directors has become one of the most important corporate governance issues of the 2018 proxy season. Many investors are beginning to insist on diversity, especially gender diversity, and are willing to oppose Boards and companies that cling to the status quo.

At year-end 2017, women occupied 16.5 percent of Board seats at Russell 3000 companies, according to Equilar’s Gender Diversity Index. Essentially, one of every six Board members, or two of every 12 Board members, is a female. This is up from 15.1 percent a year earlier. Equilar estimates that women are on pace to achieve Board parity by 2048.

Equilar also reported that the number of Russell 3000 Boards with no women dropped from nearly 25…

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How MiFID II challenges the sell-side status quo

There is a lot of discussion on Wall Street regarding the new European rules regarding payment to securities firms for stock research (sell-side research). The research, often industry specific, provides company reviews and earnings forecasts, usually with a buy/sell recommendation.

In the EU in early January 2018, payment for sell-side research was put under strict rules called MiFID II (Markets in Financial Instruments Directive II). The aim of the new rules was to curb supposed excesses because they were sometimes used to cover high trading costs, expensive subscriptions and non-research items.

In the past, trading was part of the money management business and the commissions were to be used at the discretion of the manager. The client had little or no…

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