In July 2011, we co-chaired a committee of ten corporate and securities law experts that petitioned the Securities and Exchange Commission to develop rules requiring public companies to disclose their political spending. We are delighted to announce that, as reflected in the SEC’s webpage for comments filed on our petition, the SEC has now received more than a million comment letters regarding the petition. To our knowledge, the petition has attracted far more comments than any other SEC rulemaking petition—or, indeed, than any other issue on which the Commission has accepted public comment—in the history of the SEC.
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The Million-Comment-Letter Petition: The Rulemaking Petition on Disclosure of Political Spending Attracts More than 1,000,000 SEC Comment Letters
Professor Lucian Bebchuk was recently included in the list of most highly cited authors in academic research during 2002-2012 issued by Thomson Reuters.
Spotlighting the standout researchers of the last decade, Thomson Reuters has issued Highly Cited Researchers, a compilation of influential names in science. These researchers earned the distinction by writing the greatest numbers of reports officially designated by Essential Science Indicators as Highly Cited Papers—ranking among the top 1% most cited for their subject field and year of publication—between 2002 and 2012. According to Thomsen Reuters, “the listings of Highly Cited Researchers feature authors whose published work in their specialty areas has consistently been judged by peers to be of particular significance and utility.”
This year’s list of the Ten Best Corporate and Securities Articles, selected by an annual poll of corporate and securities law academics, includes two selections from Harvard Law faculty associated with the Program on Corporate Governance: Professor Lucian Bebchuk and Professor John Coates.
The top ten articles were selected from a field of 550 pieces. Professor Robert Thompson of Georgetown Law School conducted the annual poll, and the selected articles will be reprinted in an upcoming issue of the Corporate Practice Commentator.
In a news alert released last week, the Shareholder Rights Project (SRP), working with SRP-represented investors, announced the high level of company responsiveness to engagements during the 2014 proxy season. In particular, as discussed in more detail below, major results obtained so far include the following:
- Following active engagement, about three-quarters of the S&P 500 and Fortune 500 companies that received declassification proposals for 2014 annual meetings from SRP-represented investors have already entered into agreements to move towards board declassification.
- This outcome reinforces the SRP’s expectation (announced in a blog post available here) that, by the end of 2014, the work of the SRP and SRP-represented investors will have resulted in about 100 board declassifications by S&P 500 and Fortune 500 companies.
Statistics released by the Social Science Research Network (SSRN) indicate that, as of the end of 2013, Harvard Law School professors and senior fellows associated with the Program on Corporate Governance featured prominently on SSRN’s law author rankings. These professors and fellows captured ten of the top 100 slots among the top 100 law authors in all legal areas in terms of citations to their work. No corporate faculty group at any other law school comes even close to this level of citation prominence.
As in previous years, Professor Lucian Bebchuk was ranked first among all law school professors (a post about Professor Bebchuk’s ranking is available here and his papers are available on his SSRN page here). In addition, nine other professors and senior fellows associated with the Program on Corporate Governance are included among SSRN’s 2013 top 100 law authors:
Statistics released publicly by the Social Science Research Network (SSRN) indicate that, as was the case for each of the six preceding years, Professor Lucian Bebchuk led SSRN citation rankings at the end of 2013. As of the end of December 2013, Bebchuk ranked first among all law school professors in all fields both in terms of the total number of citations to his work and in terms of the total number of downloads of his work on SSRN.
Bebchuk’s papers (available on his SSRN page here) have attracted a total of more than 4,000 citations. His top ten papers in terms of citations are as follows:
A new poll, conducted by Brian Leitter of the University of Chicago Law School, and published here, identifies the top business law faculties. Harvard Law School was ranked first, coming ahead of second-place Columbia Law School by a large margin. The poll ranks faculties in terms of their strength in the business law areas, including antitrust, bankruptcy, commercial law, contracts, corporate law and finance, and securities regulation.
The HLS business law faculty listed by the poll’s conductors are Lucian Bebchuk, Robert C. Clark, John Coates, Einer Elhauge, Allen Ferrell, Jesse Fried, Louis Kaplow, Reinier Kraakmann, J. Mark Ramseyer, Mark J. Roe, Holger Spamann, Kathryn Spier, and Guhan Subramanian.
Last week the Securities and Exchange Commission released its regulatory agenda, and this agenda no longer includes rules requiring public companies to disclose their spending on politics. The agenda now includes only overdue rules that the SEC is required to develop under Dodd-Frank and the JOBS Act. While we are disappointed by the SEC’s decision to delay its consideration of rules requiring disclosure of corporate political spending, we hope that the SEC will consider such rules as soon as it is able to devote resources to rulemaking other than that required by Dodd-Frank and the JOBS Act. The submissions to the SEC over the past two years have clearly demonstrated the compelling case and large support for requiring such disclosure.
We co-chaired a committee of ten corporate and securities law professors that filed a rulemaking petition urging the SEC to develop rules requiring public companies to disclose their spending on politics. In the two years since the petition was submitted, the SEC has received more than 600,000 comment letters on our petition—more than on any other rulemaking project in the Commission’s history. The overwhelming majority of these comments—including letters from institutional investors and Members of Congress—have been supportive of the petition. At the end of 2012, the Director of the SEC’s Division of Corporate Finance acknowledged the widespread support for the petition, and the Commission placed the rulemaking petition on its regulatory agenda for 2013.
The New York Times published on Sunday an article on the work of the Shareholder Rights Project (SRP). The article, entitled New Momentum for Change in Corporate Board Elections, was written by New York Times columnist Gretchen Morgenson.
Based on a review of the SRP’s results and interviews with the SRP’s clients and the Director of the SRP, the article discusses the benefits produced by the SRP’s work. The article begins with the observation that “shareholder efforts that actually succeed in changing dubious corporate governance policies are so rare that when they happen, it makes you sit up and take notice;” and concludes that “[c]learly, the shareholder project is having a positive effect.” The article expresses the hope that “mutual funds would join this bandwagon or construct their own,” and suggests that “[t]he Shareholder Rights Project is a model they might want to emulate.”
The SRP is a clinical program operating at Harvard Law School. The SRP works on behalf of public pension funds and charitable organizations seeking to improve corporate governance at publicly traded companies, as well as on research and policy projects related to corporate governance.
The New York Times article stresses that the work of the SRP and its clients during the 2012 and 2013 proxy seasons has produced a large number of board declassifications at large publicly traded firms, moving these companies to annual elections for directors. The article further notes that “[a] far better approach for holding directors accountable, according to a significant body of academic research, is to make them stand for election annually.”
The Harvard Law School Program on Corporate Governance and the Harvard Law School Program on Institutional Investors convened its Roundtable on Executive Compensation last Thursday, June 27. This event brought together for a roundtable discussion prominent representatives of the investor, issuer, advisor, and academic communities. Participants in the event, and the topics of discussion, are set out below.
The Roundtable, which was co-organized by Lucian Bebchuk, Stephen Davis, and Scott Hirst, was sponsored by the CFA Institute and Pearl Meyer & Partners. In addition to the CFA Institute and Pearl Meyer & Partners, other sponsors were EMC Corporation, Equilar, Frederic W. Cook & Co., JPMorgan Chase, PepsiCo, Prudential Financial, Quest Diagnostics and the Society of Corporate Secretaries and Governance Professionals.
The first session of the Roundtable on Executive Compensation focused on issues relating to engagement between issuers and shareholders regarding pay arrangements. Among the issues discussed were issuer disclosure of pay arrangements, review by proxy advisors, and communications between issuers and investors.
The second session of the Roundtable on Executive Compensation focused on the terms of pay arrangements. Among the issues discussed were pay levels, the use of peer group data in determining pay levels, how pay should be measured and assessed, and the link between pay and long-term performance.
The participants in the Roundtable on Executive Compensation included: