His research focuses on corporate governance, law and finance, and law and economics. The research work whose implications we consider includes Bebchuk, Cohen, and Hirst, The Agency Problems of Institutional Investors (2017) (https://papers.ssrn.com/abstract=2982617) and Bebchuk and Hirst, Index Funds and the Future of Corporate Governance: Theory, Evidence, and Policy (2018) (https://papers.ssrn.com/abstract=3282794).
in Mathematics and Economics from the University of Haifa (1977), an LL.B.
We first discuss disclosures necessary to make transparent to investors the extent to which arrangements enable controllers to reduce their stake without forgoing control. James Barr Ames Professor of Law, Economics, and Finance
99, no.5, pp. Our study also highlights the significance of whether information about compensation arrangements is not merely publicly available but also communicated in a way that is transparent and accessible to outsiders.This paper examines the specific features of the shareholder
We put forward an entrenchment index based on six provisions: staggered boards, limits to shareholder bylaw amendments, poison pills, golden parachutes, and supermajority requirements for mergers and charter amendments.
One explanation suggested is that banks still lack confidence because they need time to adjust to the new environment.
• Small-minority controller: Although MD would initially hold a majority of the equity capital, Dell’s structure would enable him to unload most of his shares and still retain control even with a small equity stake, and his status as small-minority controller would be expected to produce substantial governance risks and costs.
In a separate reply, "The Powerful Antitakeover Force of Staggered Boards: Further Findings and a Reply to Symposium Participants," 55 Stanford Law Review 885-917 (2002), which is available at http://ssrn.com/abstract=360840, we respond to several other responses to our original study and present additional evidence that confirms its conclusions.This paper develops a model of the causes and consequences of misreporting of corporate performance.
We begin by analyzing the perils of small-minority controllers, explaining how they generate considerable governance costs and risks and showing how these costs can be expected to escalate as the controller’s stake decreases.
We provide a framework for designing dual-class sunsets and address potential objections to their use.
The presentation focuses on the lifecycle theory of dual-class structure introduced in Bebchuk and Kastiel, The Untenable Case for Perpetual Dual-Class Stock, 2017 (https://ssrn.com/abstract=2954630). We respond in this article to Wilcox's critique and explain why it does not weaken in any way our analysis of staggered boards. “Published: Bebchuk, Lucian Arye and Jesse Fried.
Nor do individuals have the practical option to refrain from putting their savings into equity investments, as doing so would impose damaging economic penalties and ignore conventional financial guidance for individual investors.Most individual shareholders cannot obtain full information about a corporation’s speech or political activities, even after the fact, nor can most shareholders prevent their savings from being used for political activity with which they disagree. Furthermore, the restitution rule would discourage efficient market entry by some or all potential buyers of a good or service.
Consistent with incomplete contracting, face-saving benefits and private information considerations, settlements commonly do not contract directly on operational or leadership changes sought by the activist but rather on board composition changes.
We identify the determinants of settlements, showing that settlements are more likely when the activist has a credible threat to win board seats in a proxy fight. Third, we develop a case for using regulation of banks’ executive pay as an important element of financial regulation. Subsequently published in 22 Review of Financial Studies 783-827 (2009).