Law Commons^™

Corporate Governance And Executive Compensation In Financial Firms: The Case For Convertible Equity-Based Pay, Jeffrey N. Gordon

Faculty Scholarship

Unlike the failure of a nonfinancial firm, the failure of a systemically important financial firm will reduce the value of a diversified shareholder portfolio because of economy-wide reductions in expected returns and a consequent increase in systematic risk. Thus, diversified shareholders of a financial firm generally internalize systemic risk, whereas managerial shareholders and blockholders do not. This means that the governance model drawn from nonfinancial firms will not fit financial firms. Regulations that limit risk-taking by financial firms can thus provide a benefit, rather than necessarily impose a cost, for the typical diversified public shareholder. Managerial shareholding also gives rise …

Federalizing Fiduciary Duty: The Altered Scope Of Officer Fiduciary Duty Following Orderly Liquidation Under Dodd-Frank, Dorothy S. Lund

Faculty Scholarship

The financial crisis of 2008 ushered in a new era of regulatory reform in the United States. The failure of several large banks prompted Congressional scrutiny ofthe U.S. bank regulatory system. Many critics highlighted the government's failure to intervene to prevent Lehman Brothers' insolvency, which resulted in economic turmoil not yet resolved. Against this backdrop, Congress enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank") in July 2010.

Dodd-Frank mandates institutional changes to minimize economic instability and establishes regulatory processes to guide the government's response to future bank failures. At the heart of the regulation is the Orderly …

Clark's Treatise On Corporate Law: Filling Manning's Empty Towers, Ronald J. Gilson, Reinier Kraakman

Faculty Scholarship

Almost 45 years ago, in an elegantly depressive account of the then current state of corporate law scholarship, Bayless Manning announced the death of corporation law "as a field of intellectual effort." Manning left us with an affecting image of a once grand field long past its prime, rigid with formalism and empty of content:

When American law ceased to take the "corporation" seriously, the entire body of law that had been built upon that intellectual construct slowly perforated and rotted away. We have nothing left but our great empty corporate statutes towering skyscrapers of rusted girders, internally welded together …

Employee Stock Ownership After Enron: Proceedings Of The 2003 Annual Meeting, Association Of American Law Schools Section On Employee Benefits, Norman P. Stein, Colleen E. Medill, Susan J. Stabile, Jeffrey N. Gordon, Louis H. Diamond, Damon Silvers, Patricia E. Dilley

Faculty Scholarship

This session is entitled "Employee Stock Ownership After Enron," and I assume that title has drawn into this room people who know something about either Enron or employee stock, or both. For our purposes, the Enron story has as its focus the Enron 401(k) plan, which was the principal retirement plan for most Enron employees. Employees could make elective contributions to the 401(k) plan, which offered nineteen investment options, one of which was Enron stock. The 401(k) plan also provided that Enron would match employee contributions up to 3 percent of compensation. Enron's match, however, was made in Enron stock. …