“Despite the continued support of attacks by activist hedge funds by the Chair of the SEC, and many “Chicago school” academics who continue to rely on discredited statistics, there is growing recognition by institutional investors and prominent “new school” economists of the threat to corporations and their shareholders and to the economy of these attacks […]

” U.S. fertilizer producer Mosaic Co boosted its chief executive officer’s pay last year by more than $5 million as a reward for slashing costs and jobs, a regulatory filing shows. Construction of excess potash capacity and fiercer competition have pressured the sector, and leading North American producers Mosaic, Potash Corp of Saskatchewan and Agrium […]

Under what circumstances is it appropriate to lay criminal charges against a publicly listed corporation for the actions of its employees? What justifies imposing what amounts, in Terrence Corcoran’s words, to a “corporate death penalty”? (Financial Post, February 23rd, 2015) Lawyers will debate these questions ad infinitum” but what would be a common-sense answer? A […]

” But it’s no joke to Yvan Allaire, Executive Chair at the Institute of Governance, who believes The Economist is running infomercials for activist hedge funds: On a topic requiring sober, balanced coverage, The Economist cuts logical corners, tramples contrary evidence, ignores a vast store of scholarship, and conjures up an empirical “study” to produce […]

With its knack for tackling big subjects in a one-sided manner, The Economist in its February 7th issue imagines a dystopian world where corporate managers and boards of directors are generally incompetent, most investors are lazy; but “activists are a force for good”, “capitalism’s unlikely heroes” and “the saviours of public companies”! Even for a […]

“Yet companies, boards, and other investors should keep in mind that shareholder activism is often merely a tactic in a self-interested investment strategy. Shareholder activists such as hedge funds typically are pursuing short-term financial gain at the expense of long-term shareholders and stakeholders. These funds welcome the support of academics and theorists who argue that […]

In 2011, Pershing Square Capital Management, an activist hedge fund founded by William (Bill) Ackman, acquired some 14.2% of Canadian Pacific Railway’s outstanding shares and proceeded to require several changes in the management and governance of the company. The CP board resisted fiercely his entreaties. A memorable proxy fight ensued, which was won by Pershing […]

Financial Activism ” Over the past three years, the number and intensity of financial activism initiatives has increased. The ongoing debate on the wealth effects of hedge fund activism is worth following and is well-covered on Harvard’s corporate governance blog (blogs.law.harvard.edu/corpgov). Although financial activism may return immediate wealth to some shareholders through the sale of […]

Yvan Allaire and Francois Dauphin are back with another critique of Bebchuk et al.’s claims about the merits of hedge fund activism: Bebchuk et al. have produced a new version of their paper The Long-Term Effects of Hedge Fund Activism (December 2014) to be published in the June 2015 issue of the Columbia Law Review. In this […]

Bebchuk et al. have produced a new version of their paper The Long-Term Effects of Hedge Fund Activism (December 2014) to be published in the June 2015 issue of the Columbia Law Review. In this revised text, the authors struggle valiantly to cope with the challenging questions a number of critics have raised about their […]

“ A paper by Dr. Yvan Allaire entitled “The Value of ‘Just Say No,’” and also memos by our firm (here and here, the latter memo discussed on the Forum here), demonstrated that an ISS client note entitled “The IRR of No,” which argued that companies that had “just said no” to hostile takeover bids […]

“If you guessed Hedge Funds, take your seat at the head of the class.  And, do the hedge fund and private equity firms deliver on Shareholder Value?  Not quite: “…the most generous conclusion one may reach from these empirical studies has to be that “activist” hedge funds create some short-term wealth for some shareholders as […]

In case you missed it last weekend, Donna Dabney, Executive Director of the Governance Center at The Conference Board posted this November 14th presentation by  Dr. Yvan Allaire presented at the Annual Meeting of The Conference Board Governance Center. His talk was titled Do activist interventions create long term shareholder value? Allaire reviews a lot of studies and […]

On October 22, 2014, Institutional Shareholder Services issued a note to clients entitled “The IRR of ‘No’.” The note argues that shareholders of companies that have successfully “just said no” to hostile takeover bids have incurred “profoundly negative” returns. In a note we issued the same day, we called attention to critical methodological and analytical […]

A group of economists, among whom the French economist Thomas Piketty, produced a massive amount of data and statistics documenting the level and rise of economic inequality over long periods of time and across several countries. Making use of this information, Piketty wrote a book, which became the darling of the American, even global, left: […]