Charles Elson
Charles Elson
people
At the time, people thought the Gilberts were like Don Quixote. But because of that case, it legitimized the use of the shareholder resolution,
actual conflict consultant creates danger either perceived work
When a consultant does other work for the company, it creates either the actual danger or perceived danger of a conflict of interest. The consultant should either work for the board, or work for the company.
allow contract employment generally issue original packages responsibility rests since size structured
Since severance packages generally are contractual, the issue is not the size of the severance package. The issue is why was the original employment contract structured to allow such a severance package? And that responsibility rests in the board.
anywhere boards director directors disney eight ordeal point realize themselves
No director anywhere from this point on would want to put themselves through this kind of ordeal that the directors at Disney just went through for eight years. Now boards realize they must be more independent and circumspect.
appeared complete concern definition few gotten incorrect might
A few years ago, something that appeared incorrect might not be changed. Today, with heightened concern over complete accuracy, the definition of materiality has gotten a lot broader.
calls
This indicates some receptiveness to calls for better governance.
case thank
This is the quintessential case of shareholder activism, and we can thank the Gilberts for it.
board escape failure internal large question
The big question is: Was this a failure of internal controls, or a failure of the board itself? How did something this large escape their notice?
executives incentive large seem standing valid
The whole idea of parachutes was to keep executives from standing in the way of valid transactions. What they seem to have become, because of their large size, is an incentive to do transactions.
attached boards certainly director directors faded focus greater weight
Because of a greater focus on governance, the resignation of a director certainly has a greater weight attached to it. Boards have greater power. In the past, directors just faded into the sunset.
activism designed good increase term value view
It's a good thing. I view shareholder activism that's designed to increase shareholder value long term as positive.
board course decide percent whether
The board has to decide whether to sell. Thirty-five percent is a pretty big number. They have to decide if that's the right course or they may have a shareholder revolt.
managerial raymond received returns taking
It's entrepreneurial returns for managerial conduct. Exxon was there long before Mr. Raymond was there and will be there long after he leaves. Yet he received Rockefeller returns without taking the Rockefeller risk.
based directors meet novel unique
It's a novel idea. Where it's unique is that if directors don't meet internally based targets, they get nothing.