Tag: stock buybacks

In Senate testimony, SEC Chair offers insights into his thinking on a variety of issues before the SEC

In testimony last week before the Senate Committee on Banking, Housing and Urban Affairs, SEC Chair Jay Clayton gave us some insight into his thinking about a number of  issues, including cybersecurity at the SEC, cybersecurity disclosure, the regulatory agenda, disclosure effectiveness, the shareholder proposal process, climate change disclosure, conflict minerals, compulsory arbitration provisions, stock buybacks, the decline in IPOs and overregulation (including some interesting sparring with Senator Warren). Whether any of the topics identified as problematic result in actual rulemaking—particularly in an administration with a deregulatory focus—is an open question.

As the U.S. moves toward deregulation, the U.K. announces new corporate governance reforms

As discussed in this PubCo post, in November of  last year, the U.K. Government published a “Green Paper”  on Corporate Governance Reform, which, in the face of rising economic inequality, sought “to consider what changes might be appropriate in the corporate governance regime to help ensure that we improve business performance and have an economy that works for everyone.” The Paper requested input on several proposals, including pay-ratio disclosure, giving employees more influence on company boards and making say-on-pay votes binding, leading to “a broad-ranging debate on ways to strengthen the UK’s corporate governance framework.” The results are now in. Corporate Governance Reform, The Government response to the green paper consultation identifies nine proposals for reform that the U.K. Government intends to advance.   The reforms, many of which would not require legislation, are expected to become effective by June 2018 to apply in the following fiscal years. Whether any of these reforms will have a significant impact—either at home in the U.K. or as an influence abroad in the U.S.—remains to be seen.

Does a long-term view really pay off?

by Cydney Posner In this February 2017 article in the Harvard Business Review, “Finally, Evidence That Managing for the Long Term Pays Off,” a team from McKinsey and associated consultants attempt to prove empirically what has often seemed intuitively must be true — that companies that manage for long-term value […]

Shareholder proposals to exclude the impact of buybacks from executive comp metrics — will they become a new trend?

by Cydney Posner A recurring demand by hedge funds activists is that the target company return capital to its shareholders by buying back its own stock. Data compiled by S&P and Bloomberg shows that companies in the S&P 500 spent 95% of their earnings on repurchases and dividends in 2014, including spending […]

Will more regulation be imposed on stock buybacks?

by Cydney Posner Lots of companies have been buying back their stock in recent years, either on their own initiative because, for example, management thinks the shares are undervalued, or sometimes at the insistence of  hedge fund activists bent on increasing the market price of the shares.   Now, as discussed […]

They spurred the stock buyback phenomenon. Will hedge fund activists now eviscerate R&D?

by Cydney Posner It is widely recognized that one of the primary causes of the current stock buyback phenomenon has been pressure from hedge fund activists. But, as suggested in this NYT DealBook column, the activist playbook is certainly not limited to buybacks and dividends: “[a]s activist hedge funds take […]

Senator urges SEC to revisit rules and policies on stock buybacks

by Cydney Posner Data compiled by S&P and Bloomberg shows that companies in the S&P 500 spent 95% of their earnings on repurchases and dividends in 2014, including spending $553 billion on stock buybacks in 2014. The number was $1 trillion for 2013 and 2014, the biggest two-year total ever […]