Across the Board
5 Ways to Address Human Capital Management Concerns
“Put simply, investors, proxy advisors and employees want to see more detailed and quantitative human capital management disclosures. When addressing these topics, companies consider the following… [1] Provide detail that demonstrates the depth of your HCM strategy… [2] Include information on leadership responsibility, relevant programs, established publicly disclosed goals and targets… [3] For calendar year-end companies, begin thinking about revisions to your 2023 HCM disclosure… [4] Consider peer benchmarking to identify any gaps in your disclosure and needed policy updates… [5] Build in time for [a board committee] review…” HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE
Twitter Board Plans to Enforce Merger Agreement with Musk
“Twitter’s board said it plans to enforce its $44 billion agreement to be bought by Elon Musk, saying the transaction is in the best interest of all shareholders…The merger agreement includes a specific performance provision that allows Twitter to force Musk to consummate the deal, according to the filing. That could mean that, should the deal end up in court, Twitter might secure an order obligating Musk to complete the merger rather than winning monetary compensation for any violations of it… The board’s statement comes as Musk appears to be maneuvering to ditch or renegotiate his offer.” BLOOMBERG
A New Record: Median 2021 CEO Pay Reaches $14.7 Million
“The median pay package for chief executives of the biggest U.S. companies reached $14.7 million in 2021… Much of the pay consisted of equity awards…The median salary, bonus and other cash compensation was $4.1 million…. Boards have emphasized equity awards over the years, in part because institutional investors have pushed to better align executive pay with shareholder returns. Some big investors are also asking to link CEO pay to climate, diversity and other measures...” WALL STREET JOURNAL
Intel Shareholders Reject CEO Comp
“Intel shareholders voted last week against the company’s compensation for its top executives, according to a regulatory filing published on Monday. The vote is advisory, and won’t immediately affect the compensation of Intel’s executives, but sends a signal that some Intel investors are closely watching the performance of CEO Pat Gelsinger and the progress of his turnaround plan… In 2021, 16 companies had executive pay packages rejected by shareholders, according to As You Sow, an activist investor group.” CNBC
Only One Day On the Job: Moderna CFO Exits, Board Criticized
“Moderna became a $50bn success story by developing a Covid-19 vaccine at an unprecedented pace. But the biotech may have broken a less illustrious speed record this week when it removed its chief financial officer after just a day in the job. The Boston-based biotech said Jorge Gomez was leaving the company following the disclosure of an investigation at his former employer, the dental equipment maker Dentsply Sirona, which it said was linked to financial reporting issues. The sudden departure of Gomez…marks the latest in a series of executive departures at Moderna… Critics warn that the Moderna board of directors’ inability to detect potential problems at Dentsply during due diligence on Gomez — a process commonly undertaken on all new C-suite hires — points to weaknesses in corporate governance systems.” FINANCIAL TIMES
SPACs Rush to Find Merger Deals Amid Market Slowdown
“Firms that have gone public through mergers with special-purpose acquisition companies have tumbled lately alongside the technology sector and cryptocurrencies…. Those declines have slowed the creation of new SPACs and the pace of deals to a fraction of last year’s record levels. They have also prompted some companies that had previously agreed to go public through SPACs… to call off the deals and attempt to raise money privately instead…. Because so many SPACs raised money during the frenzy early last year, roughly 280 face deadlines in the first quarter of 2023, figures from data provider SPAC Research show.” WALL STREET JOURNAL
What Do Layoffs Mean for the Tech Sector?
“[The] tech sector, as a whole, appears to be scaling back as the economy enters a turbulent stretch…. The layoffs from across the tech industry are occurring for a variety of reasons, but it’s clear that the sector—which experienced explosive growth over the past two decades, leading to the creation of hundreds of tech ‘unicorns’ born of deep-pocketed venture capitalists and private equity firms—may be running out of froth… venture funding fell 13% quarter-over-quarter during the first three months of 2022, according to data from Crunchbase….” FAST COMPANY
ISS Backs McDonald’s Over Icahn In Animal Welfare Dispute
“Proxy advisory firm Institutional Shareholders Services on Monday recommended McDonald's shareholders vote for the company's directors in a boardroom fight with billionaire investor Carl Icahn over animal rights…. ISS… wrote on Monday that Icahn has ‘not made a sufficient case, on an issue-specific or broader view of ESG, that the immediate replacement of incumbent directors is necessary at this time…’ The report did note that investors who prioritize [ESG] issues may want to ‘withhold (votes) on these directors’ to signal to the company that more attention needs to be paid to these matters at the board level.” REUTERS
JetBlue Launches Hostile Takeover of Spirit Airlines
“JetBlue launched a hostile takeover of Spirit Airlines after its earlier acquisition offer was rejected…. Earlier this month, Spirit’s board of directors rejected JetBlue’s $32-a-share bid to acquire the airline in favor of an existing merger agreement with Frontier… The board cited antitrust issues and ‘an unacceptable level of closing risk’ to its shareholders… JetBlue is urging Spirit shareholders to vote against the Frontier deal. The company also said it remains open to a ‘consensual transaction at $33’ but will proceed with its hostile takeover in the meantime.” THE VERGE
From the Boardspan Library
What Could Go Wrong? Five Questions Prospective SPAC Directors Should Ask
“There may be a temptation to think all SPACs are created equal apart from their size and industry focus, but SPACs vary, including as to the quality of their sponsors, their jurisdiction of formation and their ability to indemnify directors. A SPAC is only as good as its sponsor, and those differ considerably in sophistication, experience and reputation, so researching the sponsor is crucial. Potential SPAC directors should also consider the backgrounds of their fellow directors and whether they have the experience and commitment required to oversee the SPAC.” SKADDEN via BOARDSPAN
