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Robert B. Lamm

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Bob Lamm chairs Gunster’s Securities and Corporate Governance Practice Group.  He has held senior legal positions at several major companies – most recently Pfizer, where he was assistant general counsel and assistant secretary; has served as Chair of the Securities Law Committee and in other leadership positions with the Society for Corporate Governance; and is a Fellow of The Conference Board ESG Center.  Bob writes and speaks extensively on securities law and governance matters and has received several honors, including a Lifetime Achievement Award in Corporate Governance from Corporate Secretary magazine.

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I recently attended the Winter Meeting of the Council of Institutional Investors and thought you would like to know what the Council and its members are thinking.

The British Library
The British Library

What was NOT discussed – proxy access

First, one dog that didn’t bark was proxy access.  There was virtually no mention of the subject. I can only assume that proxy access has been adopted by a sufficient number of companies that it is no longer controversial or even worth discussing.

Coming to a company near you – majority voting…

What was worth discussing was majority voting in uncontested director elections, and if you are a mid- or small-cap company, you’d be well advised to think about it.  Among other things, the Council sent a letter last year on the subject to the companies in the Russell 3000, and was not encouraged by the responses.  Most large-cap companies have it, and it seems to be inevitable that smaller companies will be pressured to adopt it as well.  Frankly, I don’t think it’s worth fighting over, and early adoption might give a company a leg up on other governance challenges.
Continue Reading News from the institutional investor front

Those of you who’ve been reading my posts for a while know that I depart from securities and governance topics only once each year, to report on my 10 favorite books of the year just gone by.  I will point out again that my list consists of the books I read during 2016 and is not limited to books that were published during the year.

By way of introduction, from my literary perspective, 2016 was the best of times and the not-so-good of times.  By that I mean that in most years I struggle to limit my choices to my favorite five fiction and non-fiction books, while for 2016 it was hard for me to come up with my remaining books in each category beyond the top one or two.

So much for introductions.  My top favorite works of fiction were:
Continue Reading My 10 Best Books of 2016

14779792521_b054cf2506_zIn the few days since the Supreme Court handed down its decision in Salman v. United States, many commentators have said, in effect, that criminal prosecutions for insider trading are alive and well.  Alive, yes; well, maybe not.

At the risk of quoting myself, almost exactly two years ago I posted an item on this blog entitled “There ought to be a law”.  My belief at the time was that insider trading law is so byzantine that it’s impossible to know where legally permissible behavior becomes legally impermissible behavior.  For better or worse (worse, IMHO), nothing has changed all that much.  In the Salman decision, SCOTUS says that a prosecutor need not prove that a tipper received something of a “pecuniary or similarly valuable nature” to convict the tipper of illegal insider trading.  So far, so good.  However, as many commentators have pointed out, Salman leaves any number of other issues wide open.Continue Reading Insider trading: there still ought to be a law

Internet Archive Book Images
Internet Archive Book Images

As noted in a recent post, the future of SEC regulation – and perhaps even of the SEC itself – is uncertain in the wake of Donald Trump’s election.  However, the SEC Staff, a smart, decent and hardworking group, continues to stick to its knitting despite the turmoil.

The most recent example of the Staff’s diligence is a “Report on Modernization and Simplification of Regulation S-K – As Required by Section 72003 of the Fixing America’s Surface Transportation Act”.  The Report was issued on Thanksgiving Eve, and it’s no turkey.  Don’t be put off by the incredibly long title or by the fact that SEC regulations have nothing to do with Surface Transportation.  The Report provides a good summary of some actions impacting Reg S-K that have been taken to date, and the Staff’s recommendations for actions down the road (assuming there is a road).

Here are some of the highlights of things that may be on the come:
Continue Reading SEC Staff’s Thanksgiving Gift: No Turkey

It remains to be seen whether the new administration will actually drain the swamp or do away with political correctness, but one hope that some of us have – regardless of our views on the election – is that the SEC may finally get around to some issues that have been on the back burner for years.

One such issue is a long-overdue overhaul of the rules surrounding shareholder proposals, including the submission and resubmission thresholds for proposals under SEC Rule 14a-8.  Many organizations, including the Society for Corporate Governance, have repeatedly urged the SEC to update these rules, which have been in place for many years.  However, the SEC has been reluctant to plunge into the area due to the likely political firestorm that would result.

Now, another organization has jumped in.  At the end of October, the Business Roundtable published “Modernizing the Shareholder Proposal Process”, a rational and well thought-out series of suggestions for bringing shareholder proposals into the 21st Century.Continue Reading A modest proposal about more modest proposals

3102056181_031bf572a9_zIn the wake of the election of Donald Trump as the next President, there has been a lot of speculation about the effect of a Trump administration on securities law and corporate governance.  Looking into a crystal ball is always risky, but here are some observations.

Conflict Minerals:  It’s too soon to tell whether Dodd-Frank will be repealed in its entirety, if it will die the death of 1,000 cuts, or if it will stay pretty much as is.  What I will say is that few will cry if the conflict minerals provisions are eliminated (and I will not be among those few).  Complying with the conflict minerals rules is time-consuming  (and therefore costly), and it’s questionable whether many people care.  Perhaps of equal or greater importance is that there is some evidence that the conflict minerals requirements are actually hurting the people they were supposed to help.

Pay Ratio: More of the same here.  There is some support for pay ratio disclosure among labor pension funds, but that’s about it.  Companies don’t like it (duh…), and mainstream investors have no use for it.  Given how the Democrats seem to have fared in the industrial states, it’s not clear that they would fall on their collective sword to save this one.
Continue Reading The SEC’s brave new (Trump) world

The morning after a surprising election outcome seems as good a time as any to bear in mind the old saw that the more things change the more they stay the same.

And so it goes with corporate governance trends.  Lost in the piles of paper and ink (real and virtual) expended on the Wells Fargo scandal is an article that appeared in The Wall Street Journal a few weeks ago suggesting that the beleaguered bank will benefit from its post-oops decision to separate the positions of CEO and Chairman of the Board.

I’ve studied this issue for several years, and I can state with confidence that there is no proof that separating the positions or having an independent Board Chair does anything to improve performance or to avoid problems.  The most that can be said is that the studies are inconclusive.Continue Reading CEO/Chair separation — the more things change…

6650058825_a23c5c0d35_qIn the midst of the chaos of the presidential election, vicious attacks from Senator Warren, and goodness knows what else, the SEC continues to crank out requests for comment, rules and interpretations.

It’s the latter category that has attracted our attention lately, as the Staff has focused on some technical matters that securities counsel have been pondering for a while.

401(k) plans with a self-directed “brokerage window”

First, in September, the SEC published updated Compliance and Disclosure Interpretations, including one on 401(k) plans that feature a so-called “brokerage window”.  It’s been generally assumed that if a plan does not include an employer stock fund in which employee funds can be invested, Securities Act registration is not required.  This CDI says “maybe not” – if the plan (a) permits employer and employee contributions to be invested through a self-directed “brokerage window”, and (b) the plan does not prohibit investments in employer stock through the window, registration may be required.Continue Reading The SEC Keeps On Keeping On

3003307653_f29d6e3b0c_zIf you’ve been reading our posts (and probably even if you haven’t), you should know by now that the SEC has launched a “disclosure effectiveness” initiative and has already taken actions to make some disclosures more “effective”.  One such action was the publication of a 341-page “concept” release asking hundreds of questions about whether and how to address a wide range of disclosure issues.  More recently, the SEC has proposed rule changes that would eliminate some particularly pesky disclosure burdens.
Continue Reading Moving Rapidly into the 90s

This posting is a reprint of an article, co-authored by Bob Lamm and David Scileppi, that appeared in the Daily Business Review on July 15, 2016.    

Recent months have been difficult for the initial public offering market. In fact, year-to-date, IPOs are down nearly 60 percent compared to last year. One of the bright spots in this IPO down market has been Sensus Healthcare Inc., a Boca Raton-based medical device company.

Picture1

We are proud to have worked with Sensus Healthcare on its IPO, which priced on June 2; Sensus is now listed on NASDAQ under the SRTSU symbol.

Though we’ve worked on numerous offerings over the course of our careers, the Sensus transaction reminded us of some key things that companies should consider as they proceed toward an IPO.
Continue Reading Top Five Considerations in a Challenging IPO Market