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Showing 9 of 138 Results in Corporate Governance
TOTM I have said it before and I’ll say it again: All of this hand wringing over executive compensation seems to exist in a parallel world . . .
I have said it before and I’ll say it again: All of this hand wringing over executive compensation seems to exist in a parallel world where corporate executives have no risk aversion, where there is no real competition for managerial talent, and where firms can only take on too much–never too little–risk. And this in a day and age (the age of never-ending financial reform regulation, Lehman/Bear, enormous public scrutiny of financial and banking industries, etc.) when the downside from excessive risk-taking is now either a) extremely large or b) non-existent (but only because of guaranteed government bail-outs). In either case, fiddling with compensation schemes will not help matters.
Read the full piece here.
TOTM Economic theory is essential to antitrust law. It is economic analysis that constrains antitrust law and harnesses it so that it is used to protect . . .
Economic theory is essential to antitrust law. It is economic analysis that constrains antitrust law and harnesses it so that it is used to protect consumers rather than competitors. And the relationship between economics and antitrust is responsible for the successful evolution of antitrust from its economically incoherent origins to its present state. In my view, which I’ve expressed in greater detail elsewhere, the fundamental challenge for antitrust is one that is created by having “too many theories” without methodological commitments from regulators and courts on how to select between them. The proliferation of economic models that came along with the rise of Post-Chicago economics and integration of game theory into industrial organization has led to a state of affairs where a regulator or court has a broad spectrum of models to choose from when analyzing an antitrust issue.
TOTM In his recent speech on the GM bankruptcy, President Obama reassured Americans that the government, which now holds 60% of GM’s stock, is not going . . .
In his recent speech on the GM bankruptcy, President Obama reassured Americans that the government, which now holds 60% of GM’s stock, is not going to try to take over management of the company…
TOTM If you haven’t been living under a rock recently, you’ve seen an incredible amount of hand wringing–and proposed regulation–around “excessive compensation.” I’m a little too . . .
If you haven’t been living under a rock recently, you’ve seen an incredible amount of hand wringing–and proposed regulation–around “excessive compensation.” I’m a little too lazy to amass all the relevant links here, but both the administration and the congress are introducing regulations/bills and talking about the issue extensively.
TOTM In the wake of Bork and Posner, and Baxter and the Reagan Revolution, a consensus emerged that big could be bad, but the harm that . . .
In the wake of Bork and Posner, and Baxter and the Reagan Revolution, a consensus emerged that big could be bad, but the harm that dominant firms could do needed to be demonstrated, not simply assumed in consequence of their sheer size. Moreover, the demonstration required harm to competition. The consensus held through the Clinton Administration, buoyed by the talented economists that it attracted. The Section 2 Report is controversial in drawing lines about where harm to competition begins, but it is not hard to imagine all sides of the debate agreeing with this from the report: “Competition is ill-served by insisting that firms pull their competitive punches so as to avoid the degree of marketplace success that gives them monopoly power or by demanding that winning firms, once they achieve such power, ‘lie down and play dead.’ ” (Report, p.8)
TOTM So says Lucian Bebchuk in the WSJ… Read the full piece here.
So says Lucian Bebchuk in the WSJ…
TOTM The Law Market, Larry Ribstein’s new and important book with Erin O’Hara looks great and is available here from Oxford University Press. The book description . . .
The Law Market, Larry Ribstein’s new and important book with Erin O’Hara looks great and is available here from Oxford University Press. The book description from the website sets the stage…
TOTM There are some pretty scary devils in the details of this Detroit bailout legislation. This WSJ article provides some specifics. Under the terms of the . . .
There are some pretty scary devils in the details of this Detroit bailout legislation. This WSJ article provides some specifics.
Under the terms of the draft legislation, “the government would receive warrants for stock equivalent to at least 20% of the loans any company receives.” Let’s put that in perspective. General Motors is seeking around $10 billion in short-term loans, so the legislation would give the government the option to buy a $2 billion stake in GM. GM’s market capitalization — the market value of its outstanding stock — is currently around $3 billion. If the government were to exercise its option today, it would pay GM $2 billion (thereby enhancing GM’s value by that amount) and would receive $2 billion worth of newly issued stock in a (now) $5 billion company. Thus, the government would end up owning 40% of GM.
TOTM It should be no surprise that the inventor of the poison pill is pro-director, but Marty Lipton’s remarks at a June 25 conference at the . . .
It should be no surprise that the inventor of the poison pill is pro-director, but Marty Lipton’s remarks at a June 25 conference at the University of Minnesota Law School left no doubt that he truly believes in his heart of hearts that we’re better off with strong, unencumbered boards. According to the WSJ’s deals blog (quoted in today’s print edition), Lipton wondered aloud whether the move to shareholder-centric governance will “simply overwhelm American business corporations.”
