corporate governance

  • Honestly I have no idea what's going on here


    Let’s Hack Google’s Share Split

    How much would you pay for a share of Google Class C stock? Those are […]

    / Jun 17, 2013 at 4:13 PM
  • It's like the one picture of him, but the pose always works.


    Aubrey McClendon Not Done Delighting Us

    Aubrey McClendon, Chesapeake Energy’s delightfully shady former CEO who was forced out by shareholders who […]

    / Jun 6, 2013 at 11:54 AM
  • NOT TO SCALE. Skilling is really off the chart, even after his resentencing.

    Banks, News

    Non-Binding Vote On Wording Of Jamie Dimon’s Business Cards Should Fix All Of JPMorgan’s Problems

    Is Jamie Dimon too powerful at JPMorgan? I have a wonderful, simple test in mind, […]

    / May 9, 2013 at 10:00 AM
  • He & the dog may just have to be my pictorial shorthand for crappy corporate governance, like Bob Diamond is for Libor manipulation.


    Earnings-Manipulating Managers Just Want To Make Shareholders Happy

    I’m generally fond of companies that find creative ways to access the public equity markets […]

    / Dec 18, 2012 at 2:05 PM
  • Vikram Pandit is somewhat puzzled at what he's doing in this post.


    Good Corporate Governance Apparently Does Some Good

    We talked a while back about how “corporate governance” is a thing that exists more […]

    / Oct 24, 2012 at 7:33 PM
  • old el paso enchilada sauce

    M&A, News

    One More Thing For Governance Day

    Felix Salmon put up a great note from a reader about investment banking conflicts; it’s fantastic so go read it. But this is a tiny bit unfair:

    You and many other commentators seem to have some misconceptions about what exactly large, sophisticated clients such as El Paso’s board hire investment bankers to do.

    Its always funny how, in the minds of pundits everywhere, those conniving and all-powerful one-percenters who sit on corporate boards become impotent and completely incapable of independent decision-making once an investment banker walks into the room.

    The basic argument is that repeat-player investment bankers provide value not by telling brainless executives whether to accept or reject a merger, but by providing intelligent decisionmakers with access and relationships, and relationships come with conflicts. As he says:

    When sophisticated clients (management teams, company boards, PE funds, etc) hire M&A bankers, they typically hire them for two main reasons (in addition to the legally required shams referred to as “fairness opinions”): Execution and Connections.

    Of those things, connections are higher-value and inextricable from conflicts. If you’re hiring someone to sell you to Company X, a bank who has done work for Company X – heck, who owns 20% of Company X – is the bank you want. And sure maybe their “conflict” will cause them to advise you to sell for a lowball price so that Company X appreciates them more but, hey, nobody’s forcing you to take their advice.

    So, yes, this is all true. But he’s maybe a little too harsh on the commentators and their misconceptions.

    / Mar 7, 2012 at 7:19 PM
  • News

    Nuns, Whores, DCFs

    For some reason it is corporate governance day at Dealbreaker, so here is a grab-bag of inchoate nonsense (for a change!). First of all look at this:

    The third-largest U.S. proxy adviser recommended that El Paso Corp shareholders vote against a proposed $23 billion sale of the company to Kinder Morgan Inc, switching its position after comments made by a Delaware judge.

    Egan-Jones Proxy Services said in a report that it was withdrawing its endorsement of the deal because of “the conflicts of interest cited by (Delaware Chancery Court judge Leo Strine) and the attendant doubts cast on the deal.”

    How should you take this? Well, one way to take it would be: if you paid me to tell you how to vote on things, you’d probably want me to look into those things and decide if they’re good things for you, and if they are tell you to vote for them and if not etc. So Egan-Jones* went and looked at this merger and decided it was a good merger and that its clients should vote for it. Then they learned about the conflicts of interest cited by the Delaware court, most of which were publicly available long before the opinion came out,** and changed their minds. Suggesting that they didn’t really do a bang-up job of examining the merger to begin with.

    But that’s a stupid way of looking at Egan-Jones’s role because, really, you’re an EP shareholder and you’re like “oh Egan-Jones ran a DCF and this price looks good to them”? You can go read the DCFs of actual investment banks if that’s the sort of thing that gets you going. Nobody’s actually paying proxy advisors (do people pay them? I don’t know) for actual advice on how they should actually vote their shares. Instead they’re paying (maybe?) for some vague patina of good “corporate governance,” which means something like “good processes and independent boards and no conflicts of interest” and gets lots of chin-stroking academic articles written about it.

    / Mar 7, 2012 at 3:53 PM