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How Accounting Comparability Between Bidders and Targets Affects Deal Outcomes

Reynolds Holding

Past research has associated financial statement comparability with (a) lower costs of acquiring information (De Franco et al., Motivated by that study, we investigate whether accounting comparability between the acquirer and the target , rather than between the target and its industry peers, is associated with more successful deals.

Finance 105
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What the Rise of Indexing Means for Corporate Governance

Reynolds Holding

Domestic passive funds and ETFs now manage more than half of all assets under management (AUM) of domestic equity mutual funds and ETFs, and the Big Three passive fund managers (BlackRock, State Street, and Vanguard) cast over a quarter of the votes in S&P 500 companies. Direct incentives.

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Do Institutional Directors Matter?

Reynolds Holding

Over the last two decades, the dramatic increase in institutional investors’ ownership of rival companies has raised questions about collusive corporate policies. [1] overlapping in the sense of owning shares in both companies) institutional shareholders between rival firms rarely establish joint board representation in both firms.

Finance 64
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Mercer’s Musings #4: Factors to Consider in Valuing Partial Ownership Interests

Chris Mercer

The third musing illustrates the depth of analysis necessary to reasonably address the complexities and nuances in valuing illiquid minority interests of private companies. ” And the answer holds regardless of any certifications appraisers might hold. The first three musings are linked here for ease of reference.

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Risk-Seeking Corporate Governance

Reynolds Holding

Several developments suggest that venture capitalists (VCs) are retreating from their traditional corporate governance role of monitoring their portfolio companies. Startup founders are retaining more equity and control over their companies, and contrary to past practice, some VCs say they will never remove a founder.

Finance 59
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Why the SEC’s Proposal for “Modernization of Beneficial Ownership Reporting” Is Flawed

Reynolds Holding

Last February, the Securities and Exchange Commission proposed to “modernize” the reporting of beneficial ownership of a company’s stock under section 13(d) of the 1934 Securities Exchange Act. As I explained in a recent comment letter to the SEC, the proposal is flawed in several ways. First, a framing point.

Equity 69
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SEC Commissioner Peirce on Flaws in New Clawback Rules

Reynolds Holding

Had we built flexibility into the rule, listing exchanges and companies could have developed sensible approaches to achieving the laudable goal of clawing back compensation paid on the basis of subsequently restated financial metrics. But how we are doing it—expansively, inflexibly, and impractically—is not. The Rule’s Scope Is Too Broad.