CEO Pay Ratios: What Do They Mean?
|
|
- Ira Greene
- 5 years ago
- Views:
Transcription
1 This column appeared in the New York Law Journal on October 25, 2017 Executive Compensation CEO Pay Ratios: What Do They Mean? October 25, 2017 By Joseph E. Bachelder III Two ratios often cited to support the argument that CEO pay is too high are: 1. the growth rate of CEO pay compared with the growth rate of the stock market; and 2. the ratio of CEO pay to average worker pay. As discussed in this column, these two ratios do not necessarily support the argument that CEO pay is too high. Also, the ratios do not explain underlying factors that cause pay levels to be where they are. Such factors include the competition of major US corporations for a very limited supply of top CEO talent. A recent Rock Center/Stanford Business School report on this subject is noted at the end of today s column. Rate of Increase of CEO Pay Compared with Rate of Increase in the Stock Market 1 On July 20, 2017 the Economic Policy Institute published a report entitled CEO pay remains high relative to the pay of typical workers and high-wage earners (the 2017 EPI Report ). It was authored by Lawrence Mishel and Jessica Schieder. Joseph E. Bachelder III is special counsel to McCarter & English, LLP. Andy Tsang, a senior financial analyst with the firm, assisted in the preparation of this column Joseph E. Bachelder
2 The 2017 EPI Report goes back to For the period (approximately 50 years) the cumulative annual growth rate (CAGR) for CEO pay was greater than the CAGR for the stock market. On the other hand, if one looks at the CAGR in more recent periods (such as from 1995 to 2015), the CAGR for CEO pay has been lower than the CAGR for the stock market. Following is a chart based on the 2017 EPI Report, showing CAGRs for CEO pay at the Top 350 Companies (i.e., the top 350 U.S. companies based on revenues) and the S&P 500 Index for the period and for the period (the latter being shown at five-year intervals). CEO Pay Growth Versus Stock Market Growth* Year Average CEO Pay at the Top 350 Company Average CEO Pay (in $ Millions) CAGR (from Year shown to 2015) Average Index Value S&P 500 Index CAGR (from Year shown to 2015) 1965 $ % % 1995 $ % % 2000 $ % 1, % 2007** $ % 1, % 2010 $ % 1, % 2015 $ , Source: Adapted from Lawrence Mishel and Jessica Schieder, CEO pay remains high relative to the pay of typical workers and high-wage earners, published by the Economic Policy Institute (July 20, 2017), at p. 6. * Data on CEO pay and stock market value is adjusted for inflation to ** Data is shown for 2007 instead of 2005 because the Economic Policy Institute report did not include data for The chart shows that from 1995 through 2015 average CEO pay at top US companies grew at a CAGR of 3.2% compared with a CAGR of 4.6% for the S&P 500 Index. For the period the CAGR for CEO pay lags significantly behind the CAGR for the S&P 500 Index 1.3% compared to 10.7%. Why this difference between growth rate from and the growth rate in more recent years? In 1965, the value of stock-related awards was a significantly smaller component of CEO pay than it became later on. The growth in CEO pay in more recent periods has reflected both the substantial growth in stock market values and the increased portion of CEO pay composed of stock awards. 2
3 CEO Pay as a Ratio of Average Worker s Pay 2 Based on the same 2017 EPI Report, at the Top 350 Companies in 2015 the multiple of CEO pay to the average worker s pay in the key industries of the respective companies was The following chart displays these ratios over time, based on data contained in the 2017 EPI Report. Year CEO Pay at a Top 350 U.S. Company as a Multiple of the Average Worker s Pay in the Key Industry of that Company Average Multiple * Source: Lawrence Mishel and Jessica Schieder, CEO pay remains high relative to the pay of typical workers and high-wage earners, published by the Economic Policy Institute (July 20, 2017), at p. 6. * Data is shown for 2007 instead of 2005 because Economic Policy Institute report did not include data for The multiples of CEO pay to average worker s pay at major U.S. companies reflect, in part, the very different roles of CEOs at major U.S. companies and the roles of the average workers at these companies. CEOs are custodians of the enterprises that they manage on behalf of shareholders whereas the average worker is performing specific duties associated with the specific job being performed. In a recent issue of the Harvard Business Review, Professor Alex Edmans of the London Business School states that: CEOs and workers operate in very different markets, so there is no reason for their pay to be linked. 4 He notes scalability as an important determinant in their jobs: A CEO s actions are scalable. For example, if the CEO improves corporate culture, it can be rolled out firm-wide, and thus has a larger effect in a larger firm. One percent is $20 million in a $2 billion firm, but $200 million in a $20 billion firm. In contrast, most employees actions are less scalable. An engineer who has the capacity to service 10 machines creates, say, $50,000 of value regardless of whether the firm has 100 or 1,000 machines. In short, CEOs and employees compete in very different markets, one that scales with firm size and one that scales less. It is interesting to compare CEO pay as a percentage of assets managed with asset managers pay. Following is a chart that shows CEO pay at S&P 500 companies as a percentage of the market cap at those companies. 3
4 A B C Average CEO Pay at S&P 500 Companies Average S&P 500 Market Cap A as a Percentage of B $13.0 Million* $44.7 Billion** 0.03% * Represents the average S&P 500 CEO pay for 2016 as reported in Matteo Tonello, Paul Hodgson and James F. Reda, CEO and Executive Compensation Practices 2017 Edition, published by The Conference Board in collaboration with Arthur J. Gallagher & Co. and MyLogIQ (August 2017), at p. 35. ** Represents the average S&P 500 market cap as of September 29, CEO pay, on average, is much less than one percent of the market cap of the company being managed (3/100s of one percent as shown in Column C of the chart). In contrast, the annual fees of an asset manager typically are in the range of 1 to 2% of assets under management ( AUM ). In addition, the asset manager typically receives a percentage of income and/or gain realized on those assets (often called a Carried Interest ). 5 The quantitative and qualitative complexities of running a major U.S. company appear to be significantly greater than those of serving as an asset manager. (The author is not denigrating the value of services provided by asset managers but is contrasting pay rates for CEOs and pay rates for asset managers relative to the services they are providing.) Looking Beyond Ratios: The Competitive Market for CEO Talent The competitive market for CEOs of major U.S. companies has forced up the level of CEO pay at those companies. Evidence of this pressure is contained in a very recent report published by the Rock Center for Corporate Governance and the Stanford Graduate School of Business. The report is entitled CEO Talent: America s Scarcest Resource? 2017 CEO Talent Survey. 6 The opening paragraph of the Executive Summary states the issue as follows: [T]he qualified pool of CEO talent to run the largest publicly traded companies in the United States is incredibly small, according to the directors who sit on the boards of these companies. The average director of a Fortune 250 company estimates that fewer than 4 people including those both inside and outside their company would be capable of stepping into the CEO role today and running it at least as well as their current CEO. 4
5 The Executive Summary of the Report prefaces its comments with excerpts from responses by two of the 113 directors of Fortune 250 companies surveyed during 2017: Talent is scarce, the job is tough, and the runway for success narrower every day. I have never seen the CEO labor market tighter. A co-author of the Report, Professor David F. Larcker of the Stanford Graduate School of Business, comments as follows: Almost across the board, directors of the largest publicly traded U.S. companies believe that the available pool of qualified CEO talent in their industry is small, the issue of fit difficult to get right, and the downside risk of making the wrong choice high... These findings have profound implications for talent development and CEO compensation: How you groom senior executives, how you plan for a CEO transition, and how you structure CEO pay really hinge on just how available replacement talent is. The Rock Center/Stanford Business School Report is important evidence of the upward pressure on CEO pay. The two ratios discussed in today s column are a reflection of that pressure. 5
6 ENDNOTES: 1. Reference in this column to CEO pay for a particular year is to compensation comprised of salary paid and annual bonus earned for that year, the award value of long-term stock incentives made during that year (e.g., stock options, stock awards, etc.), long-term cash awards earned in that year and the value of perquisites and benefits received and incremental retirement benefits earned during that year. 2. Under rules adopted by the SEC pursuant to Section 953(b) of the Dodd-Frank law, starting in 2018 most public companies will be required to report in their proxy statements the ratio of the CEO s pay to that of the median employee at the company reporting. Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, Public Law No , 953(b), 124 Stat. 1376, 1904 (2010), as amended by the Jumpstart Our Business Startups Act (JOBS Act), Public Law No , 102(a)(3), 126 Stat. 306, 309 (2012). The SEC regulation adopted pursuant to Dodd-Frank Section 953(b) was published as Pay Ratio Disclosure, SEC Release No (August 5, 2015), available at 80 Fed. Reg (August 18, 2015). See also SEC Interpretive Guidance, entitled Commission Guidance on Pay Ratio Disclosure, SEC Release No (September 21, 2017), available at and Division of Corporation Finance Guidance on Calculation of Pay Ratio Disclosure (September 21, 2017), available at In a report entitled A Financial System that Creates Economic Opportunities, issued October 6, 2017 (see page 29 of the report), the U.S. Department of the Treasury recommends that Dodd-Frank 953(b), containing the pay ratio disclosure requirement, be repealed and that rules issued pursuant to it be withdrawn. 3. The 2017 EPI Report defines average worker s pay as the average wages and benefits of production and nonsupervisory workers in the key industry of the company in question. 4. Alex Edmans, Why We Need to Stop Obsessing Over CEO Pay Ratios, Harvard Business Review (February 23, 2017). 5. A fee paid to a large institutional asset manager must, of course, take into account costs such as the staff required, overhead costs including space and other expenses. On the other hand, the 1% (or more) AUM formula (plus Carried Interest) is a formula that applies to asset managers whether they are practicing as individuals with low overhead costs or as entities with large overhead costs. 6. David F. Larcker, Nicholas Donatiello, and Brian Tayan are authors of the report, which was published by the Rock Center for Corporate Governance and the Stanford Graduate School of Business in September
Executive Pay at Public Corporations After Code 162(m) Changes
This column appeared in the printed edition of the New York Law Journal on March 23, 2018 Executive Compensation Executive Pay at Public Corporations After Code 162(m) Changes March 23, 2018 By Joseph
More informationFrom boardroom to c-suite Why would a company pick a current director as ceo?
From boardroom to c-suite Why would a company pick a current director as ceo? By David F. Larcker and Brian Tayan March 28, 2017 introduction To many observers the most important responsibility of the
More informationPerspectives Paper NACD. Pay for Performance and Supplemental Pay Definitions
NACD Perspectives Paper Pay for Performance and Supplemental Pay Definitions December 2013 Published by National Association of Corporate Directors NACD Perspectives Paper: Pay for Performance and Supplemental
More informationINSTITUTIONAL INVESTMENT & FIDUCIARY SERVICES: Investment Basics: Is Active Management Still Worth the Fees? By Joseph N. Stevens, CFA INTRODUCTION
INSTITUTIONAL INVESTMENT & FIDUCIARY SERVICES: Investment Basics: Is Active Management Still Worth the Fees? By Joseph N. Stevens, CFA INTRODUCTION As of December 31, 2014, more than 30% of all US Dollar-based
More informationExecutive Compensation Index United States
Executive Compensation Index United States 111 Academy Drive, Suite 270 Irvine, CA 92617 800-627-3697 www.erieri.com January 2016 About the Index ERI s Executive Compensation Index is a quarterly report
More informationThe Impact of the Dodd-Frank Act on Executive Compensation
Proceedings of The National Conference On Undergraduate Research (NCUR) 2012 Weber State University, Ogden Utah March 29 31, 2012 The Impact of the Dodd-Frank Act on Executive Compensation Sam Liu Department
More informationAnother Look at Super Options
Executive Compensation Another Look at Super Options January 3, 2019 By Joseph E. Bachelder III On Jan. 21, 2018, Tesla granted to its co-founder and chief executive officer, Elon Musk, a performance-based
More informationSHAREHOLDERS & CORPORATE CONTROL
SHAREHOLDERS & CORPORATE CONTROL DATA SPOTLIGHT David F. Larcker and Brian Tayan Corporate Governance Research Initiative Stanford Graduate School of Business SHAREHOLDER PROPOSALS Shareholders are active
More informationExecutive Compensation and Employee Benefits Group Client Alert: New SEC Proposed Pay-Versus-Performance Rules
May 7, 2015 CONTACTS: Joel I. Krasnow Partner +1-212-530-5681 jkrasnow@milbank.com Manan (Mike) Shah Partner +1-212-530-5501 mdshah@milbank.com Nicholas DeLuca Associate +1-212-530-5391 ndeluca@milbank.com
More informationCONTENTS EXECUTIVE COMPENSATION. Executive Compensation and Stock Buybacks: The Pros and the Cons. By James F. Reda
July/August 2018 Volume 26, Number 4 EXECUTIVE COMPENSATION Executive Compensation and Stock Buybacks: The Pros and the Cons By James F. Reda The effect of a stock buyback on an executive incentive program
More informationCORPORATE GOVERNANCE FAILURE, FRAUD, & SCANDAL
CORPORATE GOVERNANCE FAILURE, FRAUD, & SCANDAL DATA SPOTLIGHT David F. Larcker and Brian Tayan Corporate Governance Research Initiative Stanford Graduate School of Business OCCUPATIONAL FRAUD Employees
More informationExecutive Severance Arrangements: How and Why They Are Changing David M. Schmidt, James F. Reda and Kimberly A. Glass *
Executive Severance Arrangements: How and Why They Are Changing David M. Schmidt, James F. Reda and Kimberly A. Glass * Severance practices continue to evolve, but not as dramatically as we have seen in
More informationShareholder Value Advisors
Ms. Elizabeth M. Murphy Secretary Securities & Exchange Commission 100 F Street, NE Washington, DC 20549-1090 RE: Comments on the pay versus performance disclosure required by Section 953 of the Dodd-Frank
More informationCarried Interests: Current Developments
This column appeared in the New York Law Journal on January 6, 2014 Executive Compensation Carried Interests: Current Developments January 6, 2014 Joseph E. Bachelder By Joseph E. Bachelder III The tax
More informationSEC Adopts Dodd-Frank Hedging Disclosure Rule
Legal Update December 27, 2018 SEC Adopts Dodd-Frank Hedging Disclosure Rule On December 18, 2018, the US Securities and Exchange Commission (SEC) adopted a final rule requiring companies to disclose their
More informationsecurities litigation & regulation
Westlaw Journal securities litigation & regulation Litigation News and Analysis Legislation Regulation Expert Commentary VOLUME 21, issue 9 / september 3, 2015 Expert Analysis CFTC/SEC Jurisdictional Battle
More informationRisk Intelligent Proxy Disclosures 2013 Trending upward
Risk Intelligent Proxy Disclosures 2013 Trending upward The Securities and Exchange Commission (SEC) issued rules, effective on February 28, 2010, requiring disclosure in proxy statements about the board
More informationFREQUENTLY ASKED QUESTIONS ABOUT PERIODIC REPORTING REQUIREMENTS FOR U.S. ISSUERS PRINCIPAL EXCHANGE ACT REPORTS
FREQUENTLY ASKED QUESTIONS ABOUT PERIODIC REPORTING REQUIREMENTS FOR U.S. ISSUERS PRINCIPAL EXCHANGE ACT REPORTS These Frequently Asked Questions should be read together with our Frequently Asked Questions
More informationan activist view of ceo compensation
an activist view of ceo compensation By Alex Baum, Robert Hale, David F. Larcker, Mason Morfit, and Brian Tayan april 25, 2017 introduction Understanding CEO compensation plans is a continuing challenge
More informationExecutive Benefits. Watch The Gap! Recalibrating Income Protection Benefits For Highly Compensated Employees
Watch The Gap! Recalibrating Income Protection Benefits For Highly Compensated Employees Table of Contents Executive Summary... 3 Introduction... 4 Executives Value Benefits More Than Other Employees...
More informationCEO pay remains high relative to the pay of typical workers and high-wage earners
CEO pay remains high relative to the pay of typical workers and high-wage earners Report By Lawrence Mishel and Jessica Schieder July 20, 2017 Washington, DC View this report at epi.org/130354 Summary
More informationOn June 22, 2011, the Securities and Exchange Commission (the SEC ) adopted
November 4, 2011 Venture Capital Fund Adviser Exemption If you have any questions regarding the matters discussed in this memorandum, please contact the following attorneys or call your regular Skadden
More informationINVESTORS & ACTIVISM. David F. Larcker and Brian Tayan Corporate Governance Research Initiative Stanford Graduate School of Business
INVESTORS & ACTIVISM David F. Larcker and Brian Tayan Corporate Governance Research Initiative Stanford Graduate School of Business THE ROLE OF SHAREHOLDERS The shareholder-centric view holds that the
More informationFebruary 3, Intel Stockholders,
February 3, 2014 Intel Stockholders, Our goal is for executive compensation to be well aligned with stockholders interests, and the company is firm in its commitment to using executive compensation programs
More informationAssociation of Corporate Counsel
Hot SOX: Executive Compensation and Other Sarbanes-Oxley Developments March 14, 2006 Association of Corporate Counsel www.acca.com Page 2 Panel Holland & Knight LLP Jane K. P. Tam, Partner Mark J. Tarallo,
More informationSEC's Spotlight on Executive Pay: Will It Make a Difference?
SEC's Spotlight on Executive Pay: Will It Make a Difference? Knowledge@Wharton February 8, 2006 Compensation for American CEOs has soared over the past decade, far exceeding inflation and wage gains of
More informationSecurities Class Action Filings
cornerstone research Securities Class Action Filings 21 Mid-Year Assessment Research Sample The Stanford Law School Securities Class Action Clearinghouse in cooperation with Cornerstone Research has identified
More informationALI-ABA Course of Study Fundamentals of Securities Law May 31 - June 1, 2012 San Francisco, California
441 ALI-ABA Course of Study Fundamentals of Securities Law May 31 - June 1, 2012 San Francisco, California Developments under Section 16 By Peter J. Romeo Alan L. Dye Hogan Lovells US LLP Washington, D.C.
More informationSTUDY OF 2015 SHORT- AND LONG-TERM INCENTIVE DESIGN CRITERIA AMONG TOP 200 S&P 500 COMPANIES
STUDY OF 2015 SHORT- AND LONG-TERM INCENTIVE DESIGN CRITERIA AMONG TOP 200 S&P 500 COMPANIES December 2016 By James F. Reda, David M. Schmidt & Kimberly A. Glass Arthur J. Gallagher & Co. Human Resources
More informationExecutive Compensation Index
Executive Compensation Index May 2016 About the Index ERI s Executive Compensation Index is a quarterly report that measures trends in executive compensation using analysis of the companies included in
More informationSEC Issues New and Revised Guidance to Clarify Its CEO Pay Ratio Rule
Heads Up Volume 24, Issue 27 October 17, 2017 In This Issue Background Scope and Exemptions Identifying the Median Employee and Calculating Annual Total Compensation Timing and Transition SEC Issues New
More informationTICK SIZE PILOT INSIGHTS
Clearpool Review TICK SIZE PILOT INSIGHTS May 2017 The Securities Exchange Commission (SEC) approved the implementation of the Tick Size Pilot (TSP) to evaluate whether or not widening the tick size for
More informationINSTITUTIONAL INVESTMENT & FIDUCIARY SERVICES: Currency Conundrum Assessing the Currency Hedge Decision for Institutional Investors
INSTITUTIONAL INVESTMENT & FIDUCIARY SERVICES: Currency Conundrum Assessing the Currency Hedge Decision for Institutional Investors By Philip M. Fabrizio, CFA INTRODUCTION Over the past few years, the
More informationHot Topics 2013 Proxy season highlights
Hot Topics 2013 Proxy season highlights Recent governance trends, regulatory developments, and the expectation of future governance-related legislation were highlighted in the June 25 Deloitte Dbriefs
More informationThis memorandum provides a general overview of the new rules, rule amendments
Implementing Amendments to the Investment Advisers Act of 1940 November 4, 2011 If you have any questions regarding the matters discussed in this memorandum, please contact the following attorneys or call
More informationSEC Proposes Securities Offering and Disclosure Reforms for Business Development Companies and Registered Closed-End Funds
SEC Proposes Securities Offering and Disclosure Reforms for Business Development Companies and Registered Closed-End SEC Proposes an Overhaul of the Registration, Offering and Communications Processes
More informationThe Productivity to Paycheck Gap: What the Data Show
The Productivity to Paycheck Gap: What the Data Show The Real Cause of Lagging Wages Dean Baker April 2007 Center for Economic and Policy Research 1611 Connecticut Avenue, NW, Suite 400 Washington, D.C.
More informationMutual Funds through the Lens of Active Share
Mutual Funds through the Lens of Active Share John Bogle, founder of The Vanguard Group, is famous for his opinion that index funds are unequivocally the best way to invest. Indeed, over the last decade,
More informationINSTITUTIONAL SHAREHOLDER SERVICES (ISS) AND GLASS LEWIS PROXY VOTING POLICIES AND OTHER DEVELOPMENTS FOR THE 2013 PROXY SEASON
January 29, 2013 INSTITUTIONAL SHAREHOLDER SERVICES (ISS) AND GLASS LEWIS PROXY VOTING POLICIES AND OTHER DEVELOPMENTS FOR THE 2013 PROXY SEASON To Our Clients and Friends: Institutional Shareholder Services
More informationAre the Canadian Public Markets Broken? J. Ari Pandes CIRANO (Montreal) Presentation October 25 th, 2016
Are the Canadian Public Markets Broken? J. Ari Pandes CIRANO (Montreal) Presentation October 25 th, 2016 Motivation: US IPOs in Decline since 2000 800 Yearly Number of Initial Public Offerings in the US
More informationDodd-Frank Act Provisions
Corporate and Securities Alert: The Dodd-Frank Act: Provisions Affecting Corporate Governance And Executive Compensation Disclosures For All Public Companies JULY 21, 2010 On July 21, 2010, President Barack
More informationCFTC Rescinds Widely Used Private Fund Manager Exemption from Commodity Pool Operator Registration, but Retains De Minimis Exemption
February 16, 2012 Practice Groups: Investment Management Hedge Funds and Venture Funds CFTC Rescinds Widely Used Private Fund Manager Exemption from Commodity Pool Operator Registration, but Retains De
More informationManagers of private investment funds (Private
The Investment Lawyer Covering Legal and Regulatory Issues of Asset Management VOL. 21, NO. 8 AUGUST 2014 Employee Investments in Private Funds By David W. Selden and Stacey Song Managers of private investment
More informationSecurity-Based Swap Execution Facilities
SEC Proposes Rules on Registration of Security-Based Swap Execution Facilities SUMMARY On February 2, 2011, the Securities and Exchange Commission (the SEC ) proposed Regulation SB SEF, 1 which sets forth
More informationSEC Adopts CEO Pay Ratio Disclosure Rules
August 19, 2015 SEC Adopts CEO Pay Ratio Disclosure Rules By David M. Lynn and Rose A. Zukin The SEC recently adopted rules implementing Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer
More informationA Closer Look at the SEC s Proposed Pay Versus Performance Disclosure Rules
May 14, 2015 Client Alert A Closer Look at the SEC s Proposed Pay Versus Performance Disclosure Rules EXEQUITY Independent Board and Management Advisors On April 29, 2015, the U.S. Securities and Exchange
More informationJumpstart Our Business Startups Act Makes Significant Changes to Capital Formation, Disclosure and Registration Requirements
Legal Update April 5, 2012 Jumpstart Our Business Startups Act Makes Significant Changes to Capital Formation, The Jumpstart Our Business Startups Act, or JOBS Act, was signed by President Obama on April
More informationSEC Issues Interpretive Release on Soft Dollars
T O O U R F R I E N D S A N D C L I E N T S M e m o r a n d a July 27, 2006 www.friedfrank.com SEC Issues Interpretive Release on Soft Dollars On July 18, 2006, the SEC published formal guidance through
More informationForeign Private Issuers and the Corporate Governance and Disclosure Provisions
Electronically reprinted from Volume 24 Number 9, September 2010 Foreign Private Issuers and the Corporate Governance and Disclosure Provisions While the impact of the executive compensation and corporate
More informationSEC Finalizes Rules to Implement Dodd-Frank Act Regulation of Private Investment Funds and Their Managers
July 2011 SEC Finalizes Rules to Implement Dodd-Frank Act Regulation of Private Investment Funds and Their Managers BY THE INVESTMENT MANAGEMENT PRACTICE On June 22, 2011, the Securities and Exchange Commission
More informationComp Talks Proxy Season Rundown Scrutinizing 2017 to Improve 2018
Comp Talks Proxy Season Rundown Scrutinizing 2017 to Improve 2018 Reid Pearson, Alliance Advisors Megan Arthur Schilling, Cooley Moderated by Amy Wood, Cooley attorney advertisement Copyright Cooley LLP,
More informationAn exemption for advisers solely to venture capital funds (the VC Adviser Exemption ).
SEC ADOPTS FINAL DODD-FRANK ADVISERS ACT REQUIREMENTS BUT DELAYS IMPLEMENTATION UNTIL 2012 June 27, 2011 To Our Clients and Friends: Last Wednesday, the U.S. Securities and Exchange Commission (the SEC
More informationExecutive Change-in-Control and Severance Report
Sept 26, 2011 Executive Change-in-Control and Severance Report october 2011 Independence. Client-Focus. Expertise. 1133 Avenue of the Americas New York, NY 10036 Phone: (212) 921-9350 Fax: (212) 921-9227
More informationREALITY CHECK. A Rising Tide (Still) Lifts All Boats Wages Really Do Grow With Productivity Scott Winship ISSUES
MI ISSUES REALITY CHECK 2 0 1 6 Families are working harder than ever, but paychecks have barely budged. 1 HILLARY CLINTON When CEO income has risen 90 percent above the average worker, when the bottom
More informationDoes Asset Allocation Policy Explain 40, 90, or 100 Percent of Performance?
Does Asset Allocation Policy Explain 40, 90, or 100 Percent of Performance? Roger G. Ibbotson and Paul D. Kaplan Disagreement over the importance of asset allocation policy stems from asking different
More informationTHE PROXY SEASON FIELD GUIDE Third Edition
THE PROXY SEASON FIELD GUIDE Third Edition Acknowledgements: The Proxy Season Field Guide was prepared by the Public Companies and Corporate Governance Practice of Morrison & Foerster LLP. The MoFo Proxy
More informationJOHNSON ASSOCIATES FINANCIAL SERVICES COMPENSATION Third Quarter Trends and Year-End Projections 11/9/15
JOHNSON ASSOCIATES FINANCIAL SERVICES COMPENSATION Third Quarter Trends and Year-End Projections 11/9/15 After the third quarter, Johnson Associates broadly projects lower incentive compensation across
More informationSecurities Class Action Filings
CORNERSTONE RESEARCH ECONOMIC AND FINANCIAL CONSULTING AND EXPERT TESTIMONY Securities Class Action Filings 2012 Year in Review Research Sample The Stanford Law School Securities Class Action Clearinghouse
More informationSecurity-Based Swaps: Capital, Margin and Segregation Requirements
Security-Based Swaps: Capital, Margin and Segregation Requirements SEC Proposes Rules Regarding Capital, Margin and Collateral Segregation Requirements for Security-Based Swap Dealers and Major Security-Based
More informationSEC Adopts Executive Compensation and Related-Party Disclosure Reforms. A CCH Analysis by James Hamilton, J.D., L.L.M.
SEC Adopts Executive Compensation and Related-Party Disclosure Reforms A CCH Analysis by James Hamilton, J.D., L.L.M. Updated 8-02-2006 2 Introduction The U.S. Securities and Exchange Commission has adopted
More informationICI RESEARCH PERSPECTIVE
ICI RESEARCH PERSPECTIVE 1401 H STREET, NW, SUITE 1200 WASHINGTON, DC 20005 202-326-5800 WWW.ICI.ORG APRIL 2012 VOL. 18, NO. 2 WHAT S INSIDE 2 Mutual Fund Expense Ratios Continue to Decline 2 Equity Funds
More informationPotential vs. realized savings under automatic enrollment
Trends and Issues July 2018 Potential vs. realized savings under automatic enrollment John Beshears, Harvard University and NBER James J. Choi, Yale University and NBER David Laibson, Harvard University
More informationGolden Parachutes Research Spotlight
Golden Parachutes Research Spotlight David F. Larcker and Brian Tayan Corporate Governance Research Initiative Stanford Graduate School of Business Key Concepts Golden parachute: Compensation paid upon
More informationMorgan Stanley Target Equity Balanced Index
Morgan Stanley Target Equity Balanced Index Targeting Equity and Bond Allocation in a Balanced Way The Target Equity Balanced Index (the TEBI Index ) invests dynamically between Equities and Bonds in order
More informationA BILL IN THE COUNCIL OF THE DISTRICT OF COLUMBIA
1 1 1 1 1 0 1 0 1 Councilmember David A. Catania A BILL IN THE COUNCIL OF THE DISTRICT OF COLUMBIA To amend the Uniform Per Student Funding Formula for Public Schools and Public Charter Schools Act of
More informationA COMPREHENSIVE SUMMARY OF THE SEC S REVAMPED EXECUTIVE COMPENSATION DISCLOSURE RULES
A COMPREHENSIVE SUMMARY OF THE SEC S REVAMPED EXECUTIVE COMPENSATION DISCLOSURE RULES On January 27, 2006, the Securities and Exchange Commission proposed extensive and far reaching amendments to the disclosure
More informationHull, Options, Futures & Other Derivatives, 9th Edition
P1.T3. Financial Markets & Products Hull, Options, Futures & Other Derivatives, 9th Edition Bionic Turtle FRM Study Notes Reading 19 By David Harper, CFA FRM CIPM www.bionicturtle.com HULL, CHAPTER 1:
More informationDefining Issues. FASB Proposes Further Amendments to Revenue Standard. September 2015, No Key Facts. Key Impacts
Defining Issues September 2015, No. 15-44 FASB Proposes Further Amendments to Revenue Standard Contents Collectibility... 2 Completed Contracts at Transition... 2 Practical Expedients upon Transition...
More informationExecutive compensation practices and performance. April 2018
Executive compensation practices and performance April 2018 TimkenSteel s board of directors recommendation Approval, on an advisory basis, of named executive officer compensation The following pages offer
More informationTHEORY & PRACTICE FOR FUND MANAGERS. SPRING 2011 Volume 20 Number 1 RISK. special section PARITY. The Voices of Influence iijournals.
T H E J O U R N A L O F THEORY & PRACTICE FOR FUND MANAGERS SPRING 0 Volume 0 Number RISK special section PARITY The Voices of Influence iijournals.com Risk Parity and Diversification EDWARD QIAN EDWARD
More informationMMI LINCOLN LINCOLN MIDDLE MARKET INDEX INSIDE THIS ISSUE
INSIDE THIS ISSUE Quarterly Overview Private Middle Market Company Value Results Performance by Industry: Sector Breakdown Examining the LMMI: EBITDA Multiples vs. Earnings Summary of the LMMI Methodology:
More informationPension & Benefits Daily
Pension & Benefits Daily Reproduced with permission from Pension & Benefits Daily, PBD, 11/02/2011. Copyright 2011 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com Executive Pay:
More informationSay On Pay Best Practices For 2012
Say On Pay Best Practices For 2012 by John K. Wilson and Joshua A. Agen Most public U.S. corporations faced their first shareholder say on pay vote last proxy season, and the results were mixed. While
More informationSeven Myths of Executive Compensation
STANFORD CLOSER LOOK SERIES Topics, Issues, and Controversies in Corporate Governance and Leadership Seven Myths of Executive Compensation By David F. Larcker and Brian Tayan June 21, 2011 Introduction
More information2018 THE STATE OF RISK OVERSIGHT
2018 THE STATE OF RISK OVERSIGHT AN OVERVIEW OF ENTERPRISE RISK MANAGEMENT PRACTICES 9 TH EDITION MARCH 2018 Mark Beasley Bruce Branson Bonnie Hancock Deloitte Professor of ERM Director, ERM Initiative
More informationToday s Compensation Environment 2010 (9 th Edition)
Today s Compensation Environment 2010 (9 th Edition) August 4, 2010 Introduction This is the 9 th edition of Corporate and Consumer Banking Consulting Practice White Paper on current compensation trends
More informationIn his best-selling book Good to Great, Collins
6 Academy of Management Perspectives November E X C H A N G E From Good to Great to... by Bruce G. Resnick and Timothy L. Smunt Executive Overview With sales of more than 4.5 million copies, Good to Great
More informationASC 606 Is Here How Do Your Revenue Disclosures Stack Up?
Heads Up Volume 25, Issue 9 July 11, 2018 In This Issue Introduction Interim Versus Annual Reporting Considerations Description of Population Transition Disaggregation of Revenue Contract Balances Performance
More informationSUMMARY: The Securities and Exchange Commission is publishing the Chairman s agenda of
This document is scheduled to be published in the Federal Register on 06/11/2018 and available online at https://federalregister.gov/d/2018-11245, and on FDsys.gov SECURITIES AND EXCHANGE COMMISSION 17
More informationImpacts of the Dodd-Frank Wall Street Reform and Consumer Protection Act on Executive Compensation and Corporate. Governance THOUGHT LEADERSHIP
THOUGHT LEADERSHIP Alerts Service Securities & Corporate Governance Professionals Craig A. Adoor St. Louis: 314.345.6407 craig.adoor@ James M. Ash Kansas City: 816.983.8137 james.ash@ Steven R. Barrett
More informationJumpstart Our Business. Startups (JOBS) Act. March 30, Morrison & Foerster LLP All Rights Reserved mofo.com
Jumpstart Our Business 2011 Morrison & Foerster LLP All Rights Reserved mofo.com Startups (JOBS) Act March 30, 2012 The JOBS Act Background The Jumpstart Our Business Startups Act, H.R. 3606, was passed
More informationTHE CRYSTALLIZATION OF HEDGE-FUND REGULATION
THE CRYSTALLIZATION OF HEDGE-FUND REGULATION Jeff Schwartz* Eleven months after Dodd-Frank was signed into law, 1 the SEC issued final rules pertaining to Title IV of the Act, which calls for the registration
More informationInvestment Cubism 2017
Investment Cubism 2017 Presented by: Jeffrey Gundlach CEO, DoubleLine 1 Lagging Behind Percentage of U.S. Equity Funds outperformed by benchmark 5-year 10-year 15-year Large-Cap 88% 85% 92% Mid-Cap 90%
More informationDodd-Frank Application of Corporate Governance, Securities Reform and Disclosure Requirements to Public Companies
Dodd-Frank Application of Corporate Governance, Securities Reform and Disclosure Requirements to Public Companies September 29, 2010 Overview The scope of the recently enacted Dodd-Frank Wall Street Reform
More informationLydian Journal. PYMNTS.com/journal
for Growth? The Net Effects of the Proposed Durbin Fee Reductions on Consumers and Small by (from left) (Founder, Market Platform Dynamics), Robert E. Litan (Vice President for Research and Policy, Kauffman
More informationDEPARTMENT OF LABOR PROPOSES EXPANDED DEFINITION OF FIDUCIARY UNDER ERISA
CLIENT MEMORANDUM DEPARTMENT OF LABOR PROPOSES EXPANDED DEFINITION OF FIDUCIARY UNDER ERISA On October 13, 2010, 1 the Department of Labor proposed to expand the definition of fiduciary within the meaning
More informationSEC Proposes Rules Implementing New Exemptions from Advisers Act Registration Under the Dodd-Frank Act
CLIENT MEMORANDUM November 24, 2010 SEC Proposes Rules Implementing New Exemptions from Advisers Act Registration Under the Dodd-Frank Act On November 19, 2010, the SEC issued a release (the Exemptions
More informationSEC Issues Final Rules Implementing Dodd-Frank Amendments to the Investment Advisers Act of 1940
CLIENT MEMORANDUM June 29, 2011 SEC Issues Final Rules Implementing Dodd-Frank Amendments to the Investment Advisers Act of 1940 On June 22, 2011, the SEC issued final rules and rule amendments implementing
More informationAccounting Class Action Filings and Settlements
Economic and Financial Consulting and Expert Testimony Accounting Class Action Filings and Settlements Review and Analysis Table of Contents Highlights 1 Findings and Author Perspectives 2 Filings 3 Number
More informationThe Characteristics of Stock Market Volatility. By Daniel R Wessels. June 2006
The Characteristics of Stock Market Volatility By Daniel R Wessels June 2006 Available at: www.indexinvestor.co.za 1. Introduction Stock market volatility is synonymous with the uncertainty how macroeconomic
More informationISS Issues Final 2013 Voting Policy Updates
CLIENT MEMORANDUM ISS Issues Final 2013 Voting Policy Updates November 20, 2012 On November 16, 2012, Institutional Shareholder Services issued its final updates to its proxy voting guidelines for the
More informationRegulatory Notice. Request for Comment on Draft MSRB Rule G-44, on Supervisory and Compliance Obligations of Municipal Advisors
Regulatory Notice 2014-04 Publication Date February 25, 2014 Stakeholders Municipal Advisors, Issuers, General Public Notice Type Request for Comment Comment Deadline April 28, 2014 Category Fair Practice
More informationLong-Awaited Final CEO Pay Ratio Rule Issued
CLIENT ALERT Long-Awaited Final CEO Pay Ratio Rule Issued SEC Offers Modifications from Proposed Rule The Securities and Exchange Commission (SEC) has approved final implementation rules (Final Rules)
More informationMARKET-BASED VALUATION: PRICE MULTIPLES
MARKET-BASED VALUATION: PRICE MULTIPLES Introduction Price multiples are ratios of a stock s market price to some measure of value per share. A price multiple summarizes in a single number a valuation
More informationThe Goldman Sachs Group, Inc. $ Dow Jones Industrial Average -Linked Notes due
Filed Pursuant to Rule 424(b)(2) Registration Statement No. 333-198735 The information in this preliminary pricing supplement is not complete and may be changed. This preliminary pricing supplement is
More informationCompensation & Risk Research Spotlight
Compensation & Risk Research Spotlight David F. Larcker and Brian Tayan Corporate Governance Research Initiative Stanford Graduate School of Business Key Concepts Stock options counteract risk aversion.
More informationT A B L E 17.CS1 Summary Results for YoY Sales Growth Decile Analysis of All Stocks Universe, January 1, 1964 to December 31, 2009.
What Works On Wall Street Chapter 17 Case Study: Do Sales Increases Work Better than Earnings Gains? Does the Percentage Change in Cash Flow Help? What About Looking at ized Unexpected Earnings? Is a Composited
More informationDispatches from the Proxy Front: A Preview of the 2013 Annual Meeting Season. Steven M. Pantina Managing Director January 18, 2013
Dispatches from the Proxy Front: A Preview of the 2013 Annual Meeting Season Steven M. Pantina Managing Director January 18, 2013 A Look Back at Say-on-Pay Votes in the 2012 Proxy Season Nearly 2,000 ballots
More informationFinancial Reporting, Financial Statement Analysis and Valuation 8th Edition Solutions Manual Wahlen Baginski Bradshaw. Complete download:
Financial Reporting, Financial Statement Analysis and Valuation 8th Edition Solutions Manual Wahlen Baginski Bradshaw. Complete download: https://testbankarea.com/download/financial-reporting-financial-
More informationAssociation of Corporate Counsel 2017 Shareholder Proxy Season: Governance Decision Making in a Maelstrom of Change
Association of Corporate Counsel 2017 Shareholder Proxy Season: March 22, 2017 Speakers: Christine Edwards Jerry Loeser Michael Melbinger Speakers: Christine Edwards Chair of Winston & Strawn LLP s Bank
More information