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Posted by Kavya Vaghul and Ashley Marchand Orme, JUST Capital, on Monday, June 20, 2022 Editor's Note: Kavya Vaghul is Senior Director of Research and Ashley Marchand Orme is Director of Corporate Equity at JUST Capital. employers, through 23 metrics across six specific dimensions of racial equity: Anti-Discrimination Policies.
Companies, investors, policymakers, and wider society are paying increased attention to diversity, equity, and inclusion (“DEI”) within firms. Moreover, both goals require not only diversity but also equity and inclusion. Fried; and Duty and Diversity (discussed on the Forum here ) by Chris Brummer and Leo E. Strine, Jr.
private equity showed resilience in 2022. And while private equity continues to face headwinds in 2023, market dislocations often provide compelling opportunities for the most thoughtful and sophisticated investors. We review below some of the key themes that drove private equity deal activity in 2022 and our expectations for 2023.
A wide range of research examines the market for CEOs and executive mobility in public companies while largely ignoring the market for CEOs in private equity funded companies. companies (enterprise value greater than $1 billion) purchased by private equity firms between 2010 and 2016. times on its equity investment.
Wang (discussed on the Forum here ); and Share Repurchases, Equity Issuances, and the Optimal Design of Executive Pay by Jesse M. 2013 ) and specifically the CEO ( Moore, 2020 ) are more likely to sell equity when firms buy back stock. 2021) present evidence consistent with stock price manipulation around the vesting of CEOs’ equity.
Authentix or the Company) to private equity firm Blue Water Energy LLP (BWE) in September 2017. The Carlyle Group Inc. , in which he rejected plaintiffs claims of breach of fiduciary duty in connection with the sale of Authentix Acquisition Company, Inc. The plaintiffs, minority stockholders of Authentix, alleged that the Carlyle Group Inc.
Investment in environmental, social and governance (ESG) factors is a top priority for private equity, and it has been for quite some time. In fact, 72% of large private equity firms with annual revenues of $50 million to $1 billion have incorporated ESG strategies into their portfolio of asset classes. [2]. Strine, Jr.
Over the past decade, private equity investment in physician services has emerged as a driving trend toward the financialization of health care, with investors mining health services organizations to extract wealth. For a discussion of Arrow’s theories and evolving health care markets, see this symposium.
Notably, the damage payment received by the outside investors is offset in part by the reduced value of their equity stake. The investors make rational inferences based on the firm’s decision to disclose and, in case it is revealed that the firm hid material information, the investors can bring suit against the firm to recover damages.
Well-run diversity, equity, and inclusion (DE&I) initiatives can yield many benefits, including improved talent attraction and retention rates, better decision-making through diverse perspectives, and stronger relationships with customers, clients, and suppliers. Strine, Jr.;
Following the Court’s decision, companies’ diversity, equity, and inclusion (DEI) policies and programs that focus on specific underrepresented (racial) groups have resulted in a rise in backlash and reverse discrimination lawsuits (i.e., Harvard , which eliminated affirmative action in college admissions.
ISS Say-on-Pay and Equity Compensation Plan Voting. The data on say-on-pay negative recommendations derives from ISS publications and SEC disclosure summarizing the rationales with respect to the negative recommendations issued by ISS at annual meetings of Russell 3000 and S&P 500 companies through June 30, 2022.
Understanding Equity Valuation and Fundamental Analysis is essential for investors seeking clarity in their decisions. Equity valuation focuses on determining a company’s intrinsic value to assess whether a stock is undervalued or overvalued. What is Equity Valuation?
Posted by Sean Feller, Krista Hanvey, and Christina Andersen, Gibson, Dunn & Crutcher LLP, on Wednesday, February 21, 2024 Editor's Note: Sean Feller and Krista Hanvey are Partners, and Christina Andersen is Of Counsel at Gibson, Dunn & Crutcher LLP.
Posted by Tina Shah Paikeday, and Nisa Qosja, Russell Reynolds Associates, on Saturday, February 25, 2023 Editor's Note: Tina Shah Paikeday is the Global Head of the Diversity, Equity & Inclusion Practice, and Nisa Qosja is a Knowledge Consultant at Russell Reynolds Associates. This post is based on their Russell Reynolds memorandum.
Posted by Brian R. Cheffins and Bobby V. Reddy (University of Cambridge) , on Tuesday, May 23, 2023 Editor's Note: Brian Cheffins is the S. Berwin Professor of Corporate Law, and Bobby V. Reddy is an Associate Professor of Finance at the University of Cambridge. This post is based on their recent paper , forthcoming in The Company Lawyer.
Rollover equity is a powerful tool that can provide unique benefits to business owners who are selling their company in an M&A transaction. Understanding how rollover equity works, when it is used, and its impact on deal structuring… Source
The ownership, governance and financing of corporate America look radically different today than they did only a few decades ago, due to conflicting trends in the ownership of corporate equity on the one hand and corporate debt on the other. more…)
An early examination of 2022 proxy season voting statistics yields a number of notable observations: We have seen several types of proposals that attracted majority support for the first-time this season, including shareholder proposals addressing racial equity and civil rights audits, sexual harassment concerns and gender pay equity.
Increased capital gains taxes can have a far-reaching impact on the business landscape, with ripple effects extending to various sectors, including private equity and venture capital (PE/VC) investments in mergers and acquisitions (M&A).
In July 2021, State Street Global Advisors, Russell Reynolds Associates, and the Ford Foundation partnered to study best practices for effective board oversight of racial and ethnic diversity, equity, and inclusion (“ The Board’s Oversight of Racial and Ethnic Diversity, Equity, and Inclusion ”).
Consequently, fund families managing both equity and bond funds are more likely to hold stocks and bonds from the same company simultaneously (“dual holdings”). Using detailed holding data of mutual funds, our paper first documents a rising trend in mutual fund dual holdings of U.S. publicly traded firms.
ISS also has provided a preview of possible future policy changes regarding the use of performance-based versus time-based equity awards in US executive compensation programs in its Executive Summary Global Proxy Voting Guidelines Updates for 2025 and Process of ISS Benchmark Policy Development. more…)
Diversity has become a key focus for every industry in recent years, and private equity, like many other parts of the financial sector, still has significant progress to make in terms of diversity and inclusion.
Equity Prevalence and Average Vehicle Mix for CEOs Key Takeaways : Long-term incentive (LTI) designs have become strongly aligned with institutional investor and proxy advisor preferences through increased performance stock and restricted stock units and reduced stock options. This post is based on their Semler Brossy memorandum.
Deloitte surveyed 1,500 US-based corporate and private equity professionals in late 2024 to gauge their expectations for M&A activity in the following 12 months and learn more about their experiences with recent transactions (see methodology ). They’re becoming core competencies and the “new normal.”
Currently, reports on Form PF for private equity fund advisers (usually including real estate and private credit within this category) are filed annually. [2] 2] Unlike many other SEC filings, Form PF filings are not public.
those say-on-pay votes that achieved less than 50% shareholder approval), say-on-golden-parachute results and results of equity plan proposals, as well as recent guidance from the proxy advisory firms Institutional Shareholder Services (ISS) and Glass Lewis. more…)
Shifting from equity to debt financing is not simply a matter of optimizing a firm’s cost of capital, however. Highly leveraged firms are now commonplace in many U.S. industries. It also has profound implications for the firm’s behavior and investor outcomes.
Highlights Base Salary : Approximately 80% of CEOs and CFOs received salary increases Of those who received an increase, the median increase was 4.4% incentive compensation) slightly lower for CFOs (more…)
It is no exaggeration to say that over its roughly forty-year history, private equity has revolutionized both corporate finance and corporate governance. Today, private equity is one of the major global asset classes, and it has attracted a truly staggering amount of capital over a relatively short period of time.
For example, during our sample period, the market share of RI equity funds in Norway constituted about 48% of the total equity mutual fund assets under management, while in Australia the comparable figure is 11% and, in the U.S., a little less than 5%. Thus, the question arises as to the reasons for these wide disparities.
and multinational corporations, financial institutions and private equity sponsors. In this alert, we discuss: The continued rollout of the EU’s ambitious, progressive legislative path against the backdrop of continuing regulatory uncertainty in the U.S.;
After years in limbo, the British newspaper is set to be bought by RedBird Capital, an American investment firm with many sports, media and entertainment holdings.
In fact, it was through these enforcement actions, particularly against private equity advisers, that the venture industry learned to become hypervigilant regarding disclosures around conflicts, as well as fees and expenses. The landscape appears to be changing under Gary Gensler’s leadership of the SEC.
In this year’s proxy roundup, we have analyzed the use of environmental, social and governance (“ESG”) metrics in cash and equity incentive plans among the largest 100 public companies. [1] However, incentive plans can also pay out in part or in full on the basis of nonfinancial metrics, including ESG metrics.
operational and reputational) and risk appetite; equity; governance; and the role of the board. As companies continue to explore and invest in AI, they also are tasked with considering numerous business implications, such as ethics, compliance, and regulatory processes; risks (e.g.,
The argument is that the point of saying that fiduciary duties are owed to the corporate entity is to fix those duties on the one thing that is essential about that entity, which is to say, the permanent equity capital.
US equities were actually up on that day, though they lost ground in the subsequent days: If equity markets were relatively unscathed in the two weeks after the downgrade, what about bond markets, and specially, the US treasury market?
Introduction Publicly traded firms face pressure from equity market investors with short investment horizons. This post is based on their recent article published in the Journal of Financial Economics. This forces companies to make decisions that favor immediate gains over long-term value creation.
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