Current Posts


April 14, 2014 | Joseph Hall

Today, the D.C. Circuit Court partially invalidated the SEC's conflict minerals rule.

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April 14, 2014 | Betty Moy Huber
A group of investors representing over $13 trillion in assets and led by Ceres’s Investor Network on Climate Risk recently submitted recommendations to various global stock exchanges for a uniform mandatory stock exchange standard on corporate environmental, social and governance (ESG) reporting. These recommendations follow Ceres’s April 2013 consultation paper on this topic. Read more
April 10, 2014 | Ning Chiu

25% of companies are still in the early stages of compliance with the conflict mineral rules that require public disclosure on June 2, according to the latest PwC survey on where companies stand. These companies are finalizing scoping or planning and performing their reasonable country of origin inquiry, but have not yet started evaluating those responses, which is becoming the primary focus as the reporting deadline looms near. Overall, only 45% had sent an initial inquiry to more than three-quarters of their possible suppliers, and only 47% had received fully completed responses from more than half of those suppliers asked. The survey received 700 responses representing 15 industries.  

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April 8, 2014 | Ning Chiu

An SEC press release announced that a whistleblower who had already attained an award in 2012 received an additional $150,000, for a total of $200,000, after the SEC collected more money from one of the defendants in the case. The award represents 30% of the amount collected by SEC enforcement, the maximum allowed. The press release noted that the SEC is barred from providing information which could expose the identity of the whistleblower. 

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April 4, 2014 | Ning Chiu

The latest issue of ISS Board Practices reflect incremental but meaningful changes in several key governance areas. For the first time, just slightly more than half (51%) of S&P 1500 companies have two people serving as CEO and chairman. Stark differences divide companies depending on size, as 30% of mid-caps are led by independent chairs compared to only 22% of large-cap companies. The largest companies are more likely to have lead directors, however. As a reminder that ISS policies do not always coincide with company determinations, 17% of the chairmen that companies consider to be independent are deemed "affiliated" by ISS.

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April 1, 2014 | Ning Chiu
That is the title of a law review article by Delaware Supreme Court Justice Leo Strine. Chief Justice Strine wades into the debate taken up by Professor Lucian Bebchuk, who strongly advocates that managers who make investments be given increased shareholder power, against others who Professor Bebchuk has dubbed "insulation advocates," namely those who favor wide discretion for corporate managers in the form of boards and executives. The first part of the article presents the two starkly opposing views between the direct democracy pushed by Professor Bebchuk and those concerned that the consequences of being subject to majority shareholder whims will lead to an intense focus on the short-term that harms corporations. The article cites numerous dueling studies that attempt to prove either proposition, “[a]s may fit their shared experiences as Dungeons & Dragons aficionados, Bebchuk and his sparring partners share an affinity for exploring ‘myth’ and engaging in rhetorical jousts where no real world blood is shed.”  Read more
March 31, 2014 | Executive Compensation Group

On March 25, 2014, in United States v. Quality Stores, the Supreme Court held that severance payments to employees who are involuntarily terminated are taxable as wages for purposes of Social Security and Medicare taxation under the Federal Insurance Contributions Act (FICA).

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March 27, 2014 | Ning Chiu

The need for disclosure about cybersecurity breaches must be balanced against other factors, urged some of the panelists at the SEC's roundtable on cybersecurity when the discussion focused on this topic. 

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March 27, 2014 | Ning Chiu
While only 142 Russell 3000 companies have failed say-on-pay in the last three years from over 7,000 companies with those votes, 893 companies had to counter negative recommendations from ISS. By now it is well-known that ISS uses both a quantitative test and then examines qualitative factors. The qualitative review is triggered when a company receives “high” concern on the quantitative metric that examines, among other things, the CEO pay and total shareholder return to other companies, but the review may also occur even when a company receives less than “high” concern.  Read more
March 25, 2014 | Ning Chiu

Sean McKessy, the Chief of the SEC’s whistleblower office, recently warned companies not to be “creative” in trying “get people out of our programs.” He was referring to concerns regarding confidentiality, separation or employee agreements that require employees to agree that they will not report issues to a regulator in order to obtain the benefits under the contracts. His admonishment went so far as to indicate that the Commission will examine not only the companies that may have these types of agreements but will also “go after” the lawyers who prepared them, reminding people that the SEC has the power to revoke attorneys’ ability to appear before the Commission and indicating that the SEC is actively looking for these types of situations. The whistleblower office continues to receive 9 to 10 tips a day.

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