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Full-Text Articles in Business Organizations Law
The Economic Impact Of Backdating Of Executive Stock Options, M. P. Narayanan, Cindi A. Schipani, H. Nejat Seyhun
The Economic Impact Of Backdating Of Executive Stock Options, M. P. Narayanan, Cindi A. Schipani, H. Nejat Seyhun
Michigan Law Review
This Article discusses the economic impact of legal, tax, disclosure, and incentive issues arising from the revelation of dating games with regard to executive option grant dates. It provides an estimate of the value loss incurred by shareholders of firms implicated in backdating and compares it to the potential gain that executives might have obtained through backdating. Using a sample of firms that have already been implicated in backdating, we find that the revelation of backdating results in an average loss to shareholders of about 7%. This translates to about $400 million per firm. By contrast, we estimate that the …
Mickey, Can You Spare A Dime? Disneywar, Executive Compensation, Corporate Governance, And Business Law Pedagogy, Kenneth M. Rosen
Mickey, Can You Spare A Dime? Disneywar, Executive Compensation, Corporate Governance, And Business Law Pedagogy, Kenneth M. Rosen
Michigan Law Review
American business executives are under fire. Recent, notorious difficulties at companies such as the Enron Corporation brought attention to these individuals. Notwithstanding the conclusion of the trials of some of those top executives, skepticism remains about the inner workings of U.S. corporations and the quality of corporate governance. Drawing special scrutiny from some quarters is the compensation granted to corporate officers and directors. For instance, the timing of certain stock option grants, a key component of some compensation packages, raised ire because of those options' supposed backdating and fortuitous proximity to increases in share prices. Further, some questioned more generally …
Brand New Deal: The Branding Effect Of Corporate Deal Structures, Victor Fleischer
Brand New Deal: The Branding Effect Of Corporate Deal Structures, Victor Fleischer
Michigan Law Review
Consider the unusual legal structures of the following four deals: When Google went public in 2004, it used an Internet auction to sell its stock to shareholders. When Ben & Jerry's went public in 1984, it sold its stock only to Vermont residents. Steve Jobs's contract with Apple entitles him to an annual cash salary of exactly one dollar. Stanley Works, a Connecticut toolmaker, considered reincorporating in Bermuda to reduce its tax liability. Under public pressure, it changed its mind and remains legally incorporated in Connecticut. What do these deals have in common? In each case, the legal infrastructure of …
Stockholder Votes Motivated By Adverse Interest: The Attack And The Defense, Earl Sneed
Stockholder Votes Motivated By Adverse Interest: The Attack And The Defense, Earl Sneed
Michigan Law Review
It is the purpose of this article to study stockholder votes motivated by adverse interest from the standpoint of the attack and the defense. First, the remedies available to the complaining minority are examined. Then follows a study of the indicia of adverse interest in specific shareholder actions. Knowledge of the nature and import of these indicia should enable the careful lawyer to avoid or defeat the charge that unconscionable adverse interest vitiated the result of a stockholder vote.
Corporations - Compensation Of Management - Bonus Plan, Sidney Buchanan
Corporations - Compensation Of Management - Bonus Plan, Sidney Buchanan
Michigan Law Review
Defendant corporation's board of directors adopted a profit-sharing retirement plan which was never ratified by the shareholders. The plan assigned to key employees "units" having a fixed dollar value equal to the current market value of the corporation's common stock. The company promised to pay each unit holder, upon termination of employment, a sum equal to the number of units held times the increase in market value of the stock from the time the units were issued to the date employment terminated or any date within five years thereafter selected by the employee. The right of each unit-holder to receive …