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Corporate Governance

PomTalk

Commentary and analysis of developments in the fields of corporate governance, executive compensation, securities regulation and related areas geared towards institutional investors (hedge fund, pension fund, etc.).
By Murielle Steven, Jason S. Cowart, Jeremy Lieberman and and Fei-Lu Quan.

Post Frequency: 1/day

Last Entry: October 17, 2012 at 09:39:54

Auditors Explain Restatements

Posted on January 30, 2008
To further assist auditors signing off on corporate financial reports, the Public Company Accounting Oversight Board voted to adopt Auditing Standard No. 6 (AS6), Evaluating Consistency of Financial Statements. With the adoption of AS6, an auditor is now require to...

From the Pages of The Pomerantz Monitor -- Mozilo Gives up Godzila-sized Pay Package; Bank of America May Lower its Bid for Countrywide

Posted on January 29, 2008
There are some late-breaking updates to a story in the current issue of The Pomerantz Monitor regarding the Godzila-sized ?severance? package for Countrywide Financial Corporation?s CEO Robert Mozilo. As our readers know, Countrywide is the poster child for the subprime...

A lesson on the importance of internal controls from across the pond

Posted on January 28, 2008
Ever since Sarbanes-Oxley was enacted, corporate lobbyists have derided its internal control provisions as unnecessary red tape that threatens American competitiveness. According to these critics, implementing strong financial controls, and having auditors review their efficacy, was simply not worth the...

Stoneridge: Where Did the Strict Constructionalists Go?

Posted on January 25, 2008
As our readers probably know, the Supreme Court recently decided the Stoneridge case. Although the Court accepted the primary arguments we made on appeal (that the federal securities laws extend liability to secondary actors who commit primary violations and that...

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Many Companies Will Not Disclose Performance Goals

Posted on January 23, 2008
In 2006, the SEC began requiring public companies to provide detail information about their stock option awards and the compensation of their highest paid employees in an effort to give investors more transparency on how executives are compensated. However, based...

IS THE FOG SURROUNDING INVESTMENT PROFESSIONALS LIFTING?

Posted on January 16, 2008
Brokers, dealers, investment advisors. Do you have one or all? If all, is each service provided by a different firm or does one firm provide all services? A study just released in pre-publication form by the RAND Corporation, entitled Investor...

From the Pages of The Pomerantz Monitor -- Merrill Lynch, Citigroup, and the Subprime Meltdown

Posted on January 15, 2008
In the current issue of The Pomerantz Monitor, Patrick Dahlstrom and Joshua Silverman analyze the subprime mortgage meltdown and how it affects institutional investors. Investment banks such as Merrill Lynch and Citigroup are taking huge writedowns for securitized instruments built...

Study Finds Wall Street Awash In Conflicts and Insider Deals

Posted on January 14, 2008
The Wall Street Journal recently reported that regulators are investigating whether investment banks engaged in insider trading by purchasing large quantities of shares of target companies when acting as advisors to the purchasers on M&A deals. The investigations were prompted...

SEC Unveils Web-Based ?Executive Pay Finder?

Posted on January 10, 2008
In late December, the SEC launched the first web-based utility that allows investors to compare the executive compensation packages at 500 of the nation?s largest corporations. The database, linked here, is extremely easy to navigate and very complete: it includes...

Compensation Disclosures Continue to Fall Short

Posted on January 09, 2008
As it has been nearly one year since the SEC implemented its executive compensation disclosure rules, the CFA Centre for Financial Market Integrity recently sent a letter to the SEC expressing its dissatisfaction with the way ?the Rules were interpreted...

From the Pages of The Pomerantz Monitor

Posted on January 07, 2008
Pomerantz Partner Adam Prussin recently reported on the hottest development in "socially responsible" investing: "ESG" ratings on environmental, social and governance issues. An increasing number of firms are using ratings formulas for picking stocks that take into account -- in...

Shareholders Think Say on Pay Will Add Value

Posted on December 28, 2007
While debates about shareholder rights are often conducted at a level of abstraction that does not easily lend itself to empirical proof, a group of enterprising academics recently released a paper that attempts to buck this trend, at least with...

House Report Identifies Widespread Conflicts of Interest Among Corporate Compensation Consultants

Posted on December 20, 2007
The Committee on Oversight and Government Reform, chaired by Representative Henry Waxman, just released a report, ?Executive Pay: Conflicts of Interest Among Compensation Consultants.? The report begins by acknowledging the obvious fact that consultants to corporations face a financial conflict...

Government Accounting Office Finds Additional Deficiencies At SEC

Posted on December 17, 2007
For the second time in as many months, the Government Accounting Office (GAO) is set to release a report criticizing the Securities and Exchange Commission (SEC) for serious operational deficiencies. According to The New York Times' Gretchen Morgenson, the report...

CII weighs in on Proposed use of IFRS

Posted on December 14, 2007
With apologies to our readers, we just came across this letter, dated November 9, 2007, which was written by the Counsel for Institutional Investors ("CII") to the SEC concerning the proposal that U.S. issuers be allowed to file financial statements....

The Future of the "Group Pleading Doctrine"

Posted on December 13, 2007
Typically, plaintiffs at the pleading stage satisfy the Private Securities Litigation Reform Act?s requirement of ?pleading with particularity? by invoking the so-called ?group pleading doctrine.? The doctrine allows plaintiffs to make allegations of misstatements and omissions in group-published documents, for...

SEC Demanding More Disclosure on Subprime Losses

Posted on December 12, 2007
As financial companies have taken $76 billion in losses and write-downs due to the collapse of the subprime market, the SEC wants companies to fully disclose those losses in their next annual reports. Yesterday, the SEC sent letters to more...

From the Pages of The Pomerantz Monitor

Posted on December 11, 2007
As Pomerantz Partner Michael Buchman reported recently in The Pomerantz Monitor, The State of New York has one of the largest Medicaid programs in the country, spending approximately $50 billion per year. Up to now, Medicaid fraud has been pursued...

?Say on Pay? Proposals Likely to Become a Central Focus of 2008 Proxy Season

Posted on December 06, 2007
With the SEC?s recent vote to maintain the status quo -- at least for the time being -- with respect to proxy access (please see Josh Silverman?s post of Tuesday, December 4th, below), what?s a shareholder to do? Well, perhaps...

Rethinking Change-In-Control Benefits

Posted on December 05, 2007
According to a new survey by Mercer, in the last two years, 64% of the 182 companies surveyed by Mercer made changes to their change in control (?CIC?) programs for executives in ?response to shareholder concerns that the programs provide...

SEC rejects proxy access

Posted on December 04, 2007
Make no mistake -- Chairman Christopher Cox and the SEC are out to protect corporate interests, not shareholders. In a rushed vote, Cox and the SEC approved a rule that will allow companies to deny shareholders the right to put...

Prominent Corporate Law Scholar Supports Reintroduction of Aiding and Abetting Liability

Posted on November 30, 2007
The New York Law Journal recently published an article authored by influential corporate law scholar, Professor John C. Coffee, Jr. of Columbia Law School. In his opinion piece, Professor Coffee predicts that we are roughly a year away from having...

A Restatement Is A Kiss of Death For Executives

Posted on November 28, 2007
In a new study on management turnover rates, two researchers, Anup Agrawal and Tommy Cooper, found a 10% difference in the adjusted turnover rate for chief financial officers at companies that restated, compared to CFOs at non-restating companies. Moreover, using...

From the Pages of The Pomerantz Monitor

Posted on November 27, 2007
In the November 2007 Pomerantz Monitor, Pomerantz Partner Adam Prussin reported on reverberations of the decision in the KPMG tax shelter case. The district court dismissed the charges against 13 former KPMG employees, holding that the Department of Justice?s then-existing...

The Global Trend Towards Class Actions

Posted on November 26, 2007
While Corporate America and the Paulson committee are doing everything possible to repeal or severely limit the class action mechanism in the U.S., other nations are slowly embracing the concept. According to Portfolio Media, the Italian Senate last week passed...

SEC Chairman Testifies on Proposed New Proxy Access Rules Before Senate Committee

Posted on November 15, 2007
As Murielle Steven Walsh reported a few weeks ago in her PomTalk post of October 24th, SEC Chairman Christopher Cox has been ?criticized for his ambiguous stance on shareholder proxy access.? At issue is the fact that current proxy rules...

Compliance Officers Meet in Washington

Posted on November 15, 2007
Mutual fund and investment advisor Chief Compliance Officers met yesterday in Washington to attend the SEC?s third annual CCOutreach national seminar. The program is designed to help the officers improve their compliance programs by promoting a high level of communication...

Directors? Compensation Keeps Going Up

Posted on November 14, 2007
In a new comprehensive report by Towers Perrin on compensation for outside board directors of publicly traded companies, the report found that total compensation increased to a median level of $174,500 in 2006, up 8% from $162,285 in 2005. According....

Pulled from the pages of The Pomerantz Monitor . . .

Posted on November 13, 2007
Going forward, every two weeks PomTalk will report on a story that first appeared in our related print publication, The Pomerantz Monitor. Jim Hodgson recently informed readers of our print sibling about the first anniversary of the SEC?s new disclosure...