Proxy advisory firms lack transparency and their recommendations are not always in shareholders’ interests. However, despite their poor performance, the two biggest firms’ market dominance has never been challenged. This is a market failure that warrants a change in regulation, Professors Steven N. Kaplan and David F. Larcker argue.
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Institutional investors that own between 70 and 80 percent of the market value of US public companies often rely on investment advisers voting on behalf of clients. The SEC and corporate executives are willing to curb the power of the two largest proxy advisory companies, ISS and Glass Lewis. In a new episode of their podcast Capitalisn’t, Kate Waldock and Luigi Zingales discuss the new proposed regulation with SEC commissioner Robert Jackson.
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In the first of three interrelated articles, transportation consultant Hubert Horan discusses Uber’s “uncompetitive economics.” There is no real innovation in the company’s business model, he argues. Its market share is the product of predatory pricing and gigantic subsidies, not of higher productivity.
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SEC Chairman Jay Clayton claimed that the draft regulation on shareholders’ votes and proxy advisory firms received approval by hundreds of “Main Street” Americans. A Bloomberg investigation reveals that many of the letters that the SEC published on its website are fake. This reform could change American capitalism. We deserve more serious debate.
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Anat Admati calls on economists and academics to engage with governance and political economy issues, scrutinize models before applying them to the real world, and enhance the positive impact of their work.
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A new SEC proposal regarding proxy advisors will make it harder for shareholders to vote against CEOs’ preferences. However, there is a 60-day period to comment and propose amendments to the new regulation. Please send your comments to the SEC and to ProMarket as well. We will publish the best of them on our website.
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The corruption exposed by Israeli antimonopolists has been a key driver of Benjamin Netanyahu’s current political woes.
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SEC Commissioner Robert Jackson dissented from his SEC colleagues’ proposal on how to reform proxy advisors regulation. New rules, he argues, would introduce a tax on firms who recommend that shareholders vote in a way that executives don’t like. Jackson’s analysis also shows that the proposed changes will remove key CEO accountability measures from the ballot.
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In a new episode of their podcast Capitalisn’t, Kate Waldock and Luigi Zingales discuss one of the most hated industries of America: private equity. Democratic presidential candidate Elizabeth Warren has a plan to curb its abuses, but can it work?
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In an excerpt from his new book “Super Pumped: The Battle for Uber,” New York Times reporter Mike Isaac reveals the details of Uber’s fight against Portland authorities to enter the local market. Isaac will present his book at a Stigler Center and Harry L. Davis Center event on November 18.
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For companies that sell on Amazon’s platform, “winning the Buy Box”—the area on the right-hand side of the page that says “Add to Cart” or “Buy Now”—is everything. While Amazon says it’s a neutral arbiter, there is ample evidence that the company has rigged its algorithm to deliver outcomes that further its own interests at the expense of sellers and consumers.
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The White House asked the Italian government for support in its “investigation on the investigators” to prove the existence of a Democratic plot against Donald Trump in 2016. Prime Minister Giuseppe Conte secretly cooperated and then received a crucial public endorsement from Trump in the midst of a political crisis. The next episode of the impeachment story will be staged not in Kyiv, but in Rome.
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