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 […]

On November 14th, Dr. Yvan Allaire, the Executive Chair of the Institute for Governance (IGOPP), was the keynote speaker at The Annual Meeting of the Corporate Governance Center – Conference Board in New-York. I spoke on the topic: Do activist hedge funds create long-term shareholder value? His presentation was followed by a panel discussion with […]

When, for reasons that will be left unexplained here, hedge funds decide “to go public”, i.e. list shares on a stock exchange, they marshal all the available legal, fiscal and accounting acumen to achieve two goals: 1. Pay as little tax as possible; 2. Keep total, unfettered control of the company. To achieve the latter, […]

Although smaller than Burger King, Tim Hortons (TI) is more profitable and better managed than Burger King. Their stock market valuation is comparable. Why then is it not Tim Hortons that is trying to buy Burger King? TI becomes a target of hedge funds One must recall that in early 2013, two activist funds (Scout […]

Boards of directors have the best record at extracting good deals for their shareholders. In an opinion piece published in the Financial Post on May 6, (Shareholders should decide takeovers), Mr. Philip Anisman responds to my piece published in the Financial Post of April 30 (Canada needs a new takeover regime). Mr. Anisman recycles the […]

[…] «That may be true. As Yvan Allaire of Montreal’s Institute for Governance wrote in an opinion piece this week: “The legislative measures the working group is proposing are draconian.” Among them: Allowing Quebec companies to adopt variable voting rights that could increase the longer shares are held (the aim being to keep the influence […]

Five years after the collapse of Lehman Brothers, the Forum:Blog will be publishing a number of personal views by key figures on the event and its implications. The views expressed are those of the author, not necessarily the World Economic Forum. A great deal of pain was inflicted on ordinary, innocent people by the financial […]

The time has come to modernize the obsolete regulations of takeovers in Canada. What’s wrong with the current system of regulations of hostile takeovers put in place in 1986 by the Canadian securities commissions? Well, it is quaint, distorting…and illegal. For instance, empirical results provide clear evidence that the changes in U.S. state laws to […]

Pity Indra Nooyi. When she won the coveted post of CEO at PepsiCo Inc. in 2006, she indicated she wanted to shift Pepsi from snack foods to health foods and from caffeinated colas to juices. “It doesn’t mean subtracting from the bottom line,” she argued: The company would simply bring together what is good for […]

The policy paper, entitled “Pay for Value: Cutting the Gordian Knot of Executive Compensation“.  prepared by Professor Yvan Allaire for the working group on compensation of IGOPP, noted that, “We are making a series of recommendations about the complex and emotionally charged issue of executive compensation. We hope that our analysis and recommendations will prove a valuable […]

The imminent initial public offering of Facebook Inc. shares has the hallmarks of a momentous event: the number of instant millionaires and billionaires, the implicit market value of a toddler company, the young age of its founder, and so on. But what is also remarkable about the Facebook IPO is the way its founder intends […]

In a profanity-laden interview with Terence Corcoran of the National Post (January 6th 2011), Professor Michael Jensen rejects the accusation in Roger Martin’s latest book that he is the spiritual father of the shareholder-value maximization movement. True enough; in the seminal Jensen-Meckling article of 1976 that Martin singles out as the source of this abomination, […]

Executive compensation has become a nasty bone of contention in most developed societies. Whatever argument is invoked to explain and justify the large amounts paid to executives, the very public disparity  of income within a given society and within the same organization turns the issue into, at best, a rallying cry for advocates of a […]

To stifle financial speculation and ban the shenanigans that brought on the devastating stock market crash of 1929, the U.S. Congress enacted a series of measures to save a moribund capitalist system. The Glass-Steagall Act of 1934, in barely 53 pages, mandated a new regulatory framework for banks and other financial institutions in the United […]

*(The opinions expressed herein are the author’s and not necessarily those of IGOPP or of its board of directors) In April 1990, the Pennsylvania legislature enacted one of the strongest anti-takeover bill passed by any state. The immediate purpose of that bill was to block the Canadian Belzberg family in its attempt to acquire Armstrong World Industries, […]