Activist investors… Your company could be doing better. The stock is in the doldrums, and the price-to-book ratio is low. On a variety of financial measures — shareholder returns, revenue growth, operational costs, and so on — the company is underperforming its peers. Cash flow is reasonably healthy, but one of the divisions is starting to falter. Adding insult to injury, management won the last say-on-payvote by less than a large margin.
Your company, in short, is a prime target for an activist hedge fund. Such investors make money by taking stakes, and board seats, in public companies and pressuring them to put themselves up for sale, spin off the parts, repurchase stock or increase dividends, or make operational changes. Activist funds have outperformed other types of hedge funds in recent years, attracting capital inflows. They currently boast more than $150 billion in assets under management, says Paula Loop, leader of PwC’s Governance Insights Center, “and they are looking for places to invest in.” Read article.
Whistleblower… The Securities and Exchange Commission paid a record $37 million to whistleblowers last year. Even so, research has found that as many as half of the employees who witness misconduct do not disclose it.
To encourage more disclosure, the Association of Certified Fraud Examiners has recommended that companies specifically emphasize anti-retaliation protections in their communication with workers, and the great majority of Fortune 500 firms now do so.
Yet, sensible and responsible though such measures would seem, new research suggests they are counterproductive. Read article.
State Street, Mars, SunEdison, ARIAD, Darden Restaurants, Brock Group, Selective Insurance, MB Financial, Natural Sunshine Products, Focus Brands
With the appetite for IPOs at a low ebb, carve-outs offer an alternative path to boosting shareholder value and firming up the balance sheet
An experiment suggests that too vigorously stating whistleblower protections to employees can backfire.
The luxury goods company predicts sales and earnings growth will continue to be pressured by the strength of the dollar and an uncertain economy.
The surge in the Fed’s remittances to Treasury reflects in part the interest earned from its bond-buying programs to stimulate the economy.
The Denver company says the declining price of oil and the closure of a key pipeline “continue to be serious problems.”
The online payment firm’s move is part of a “deluge of interest” by U.S. companies in Cuba since the easing of financial restrictions.
A new survey finds compliance officers are “facing challenges to perform as a strategic partner to the business.”
Activist investors are bigger and hungrier than ever. Here’s how to keep them at bay.
A finance chief outlines a strategy of selling jewelry based on its “meaning” rather than its glitter.
A $98 million write-down of the value of the Land’s End name and a 6% drop in net sales were the lowlights.
At the same time, the research firm expects major changes in the products, including ‘smarter watches … built by classic watch makers.’
A shareholder is requesting that high-profile tech companies report on how they are addressing gender pay inequality.
The bankrupt company’s plans cover the retirement benefits for more than 21,000 people and are underfunded by about $292 million.
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