Lucian Bebchuk
Lucian Bebchuk, Professor of Law, Economics, and Finance, and Director of the Corporate Governance Program at Harvard Law School, is co-author, with Holger Spamann, of Regulating Bankers’ Pay.
-
2010-11-26
| Once upon a time, in the 1990's, investors could out-perform the market by trading solely on firms' anti-takeover provisions. Nowadays, investors have learned to price these provisions - rewarding firms whose managers are exposed to the market for corporate control - but there might be other features of governance on which they could trade profitably.... read |
-
2010-09-20
| Spending by corporations on political campaigns and candidates raises well-known questions about democracy and private power. But another important question is often overlooked: who should decide for a publicly traded corporation whether to spend funds on politics, how much, and to what ends?... read |
-
2010-07-27
| It is now widely accepted that it is important to reward bankers for long-term results, because tying their compensation to short-term returns encourages them to take excessive risks. But tying executive payoffs to long-term results does not provide a complete answer to the challenge facing financial firms and regulators.... read |
-
2010-05-24
| Credit rating agencies play a crucial role in modern capital markets, but they completely failed in the years preceding the financial crisis. And the problem hasn’t gone away: as long as issuers of securities choose and compensate the firms that rate them, the agencies will have a strong incentive to reciprocate with good ratings – unless they, too, are subject to ratings.... read |
-
2010-03-18
| In a report just filed with the US court that is overseeing the bankruptcy of Lehman Brothers, a court-appointed examiner described how the firms' executives deliberately pursued an aggressive investment strategy, took on greater risks, and substantially increased leverage. In this way, they literally destroyed the company - but, worse still, they were paid to do so.... read |
-
2010-02-23
| The US Supreme court recently struck down limits on companies’ freedom to spend money on political elections, fueling fears that shareholders’ interests will trump those of other groups, such as consumers and employees. But corporate political spending can also be detrimental to shareholders' interests by weakening rules governing corporate governance and investor protection.... read |
-
2010-01-18
| There is now intense debate about how the pay levels of top executives compare with the compensation given to rank-and-file employees. But, while such comparisons can tell us much about the dynamics of inequality, the distribution of pay among top executives also deserves close attention, because it may very well point to serious corporate governance problems.... read |
-
2009-12-18
| As governments around the world develop policies to deal with failing financial institutions, they should be sure to pick their beneficiaries wisely. In particular, they should study and avoid the mistakes made in the AIG bailout in late 2008.... read |
-
2009-11-18
| Standard pay arrangements give executives broad discretion over when they sell shares and exercise options awarded to them as part of compensation plans. But such discretion is both unnecessary and counterproductive, while removing it would enhance the performance of firms – and thus value for shareholders.... read |
|
Should Bondholders be Bailed Out?
|
Lucian Bebchuk 
|
|
The general rule of thumb that has emerged from the past year’s turmoil seems to be that when a financial institution is deemed “too big to fail,” governments should and will intervene if it gets into trouble. But a better approach may be to protect only some creditors of a bailed-out institution, and never their bondholders. ... read
|
-
2009-05-07
| Last year's global financial meltdown has naturally spurred interest in bringing about improvements in corporate governance, including reliable standards for evaluating its quality in publicly traded companies. But the quest for a single set of global governance standards is misguided.... read |
-
2009-06-18
| The US government is now permitting ten of America’s biggest banks to repay about $70 billion of the capital injected into them last fall, after the banks passed so-called “stress tests” and raised additional capital. But neither the stress tests, which G-8 finance ministers have now agreed to replicate, nor the ability to raise fresh capital prove that the banks are truly healthy.
... read |
-
2009-08-18
| Although some financial firms are reforming how – and how much – they pay their employees, governments around the world are seriously considering regulating such firms’ compensation structures, spurring loud protests from financial bosses. But, as the recent financial crisis showed, such regulation is both justified and necessary.... read |
-
2009-07-15
| With Goldman Sachs and other big banks once again reporting huge profits, Wall Street and the City of London are awash with rumors that salaries and bonuses this year will match their level before the financial crisis hit. But banks' return to profitability must not be allowed to disguise the need -exposed by the crisis - to reform financial executives' pay arrangements.... read |
-
2009-11-18
| Standard pay arrangements give executives broad discretion over when they sell shares and exercise options awarded to them as part of compensation plans. But such discretion is both unnecessary and counterproductive, while removing it would enhance the performance of firms – and thus value for shareholders.... read |
-
2009-09-21
| When they met earlier this month, G-20 finance ministers and central bankers called for global improvements in corporate governance. Such appeals are often heard, but powerful vested interests - sometimes where least expected - make it hard for governments to follow through in the absence of strong and persistent public pressure.... read |
-
2009-10-19
| The general rule of thumb that has emerged from the past year’s turmoil seems to be that when a financial institution is deemed “too big to fail,” governments should and will intervene if it gets into trouble. But a better approach may be to protect only some creditors of a bailed-out institution, and never their bondholders. ... read |
-
2010-07-27
| It is now widely accepted that it is important to reward bankers for long-term results, because tying their compensation to short-term returns encourages them to take excessive risks. But tying executive payoffs to long-term results does not provide a complete answer to the challenge facing financial firms and regulators.... read |
-
2010-05-24
| Credit rating agencies play a crucial role in modern capital markets, but they completely failed in the years preceding the financial crisis. And the problem hasn’t gone away: as long as issuers of securities choose and compensate the firms that rate them, the agencies will have a strong incentive to reciprocate with good ratings – unless they, too, are subject to ratings.... read |
2010-07-27
