MEREDITH FOSTER – Special Meetings and Consent Solicitations: How the Written-Consent Right Uniquely Empowers Shareholders -Yale Law Review

conclusion
To summarize, the rights to act by written consent and to call a special meeting are very similar in what they allow shareholders to do. This fact may seem
to support the commonly held view that shareholders that already have the right
to call a special meeting do not also need the right to act by written consent. But
looking only at what the two rights allow shareholders to do—and not at what
restrictions boards can place on those rights—is a mistake.
Contrary to popular opinion, the right to act by written consent is more empowering to shareholders than the right to call a special meeting, because boards
cannot unilaterally impose the same type of restrictions on the latter as they can
on the former. A review of the corporate governance documents of large Delaware companies demonstrates the significance of this distinction. Boards have,
with little oversight or fanfare, significantly restricted shareholders’ exercise of
their special-meeting right. However, companies have generally not imposed
similar restrictions on shareholders’ exercise of their written-consent right.
179. See supra notes 86-91 and accompanying text.
180. Lipton et al., supra note 63.
special meetings and consent solicitations
1741
Thus, even though the two rights can be used to accomplish similar actions, the
written-consent right is used far more frequently than the special-meeting right
to conduct fights for board control.

Shareholder Action by Written Consent

This article seems to think action by written consent is mostly useful.

“Shareholder action by written consent refers to corporate shareholders’ right to act by written consent instead of a meeting. This type of consent avoids some of the negative characteristics of shareholder meetings. A consent resolution, formally called a Shareholders’ Consent to Action Without Meeting, is a written document that details and validates the procedures taken by shareholders within a corporation without requiring that a meeting occur between shareholders and/or directors.

In general, written shareholder consents require the same number of approval votes as would be required if the shareholder meeting actually occurred. Keep in mind that it’s not necessary for a meeting to actually be in person these days either, as telephone and video meetings are common and may be included as acceptable methods of holding meetings according to a corporation’s bylaws.  . . . ”

Source: Shareholder Action by Written Consent

Action by Written Consent: A New Focus for Shareholder Activism

“. . .  Under Delaware law, shareholder action may be taken by written consent in lieu of a meeting unless the certificate of incorporation either expressly prohibits action by consent or effectively prohibits it by requiring that such action be taken only by unanimous consent. [2] Written consent proposals seek to have the board propose a charter amendment to permit action by written consent. Action by written consent may be used to accomplish, among other acts, the wholesale amendment of bylaws and, absent specific impediments in the certificate of incorporation, removal of directors without cause and filling of board vacancies, all without waiting for an annual or special meeting. As a result, except in limited instances such as where the charter prevents the removal of directors without cause, the right to act by written consent may be used to replace up to the entire board of directors. Among other things, the ability to gain control of the board can undermine takeover defenses, such as a shareholder rights plan, and thereby potentially prevent the board from using a rights plan or other defensive mechanism to explore alternative ways of realizing value for shareholders. The vulnerabilities that arise from the existence of the right to act by written consent, even if not actually exploited, arguably give hostile bidders and insurgent shareholders leverage whenever they are negotiating with incumbent boards.  . . .”

This article doesn’t make me an authority on this complicated subject.

Source: Action by Written Consent: A New Focus for Shareholder Activism

David Swensen, Who Revolutionized Endowment Investing, Dies at 67 – The New York Times

David Swensen, a money manager who gave up a lucrative Wall Street career to oversee Yale University’s endowment and proceeded to revolutionize endowment investing, in the process making Yale’s the best-performing fund in the country over a 20-year period, died on Wednesday in New Haven, Conn. He was 67.

His wife, Meghan McMahon, said the cause was kidney cancer, which he had since 2012. He died at Yale New Haven Hospital.

Mr. Swensen’s innovation at Yale was to shift endowment investing from a formulaic menu of stocks and bonds to a portfolio that included hedge funds and even timberlands. When he took over at Yale in 1985, the endowment was worth $1.3 billion. Since then it has grown to $31.2 billion, passing those at both Princeton and the University of Texas and trailing only Harvard University’s.

Mr. Swensen was particularly proud of how the growing endowment had helped the university contribute to financial aid. . . . “

‘Self-confident yet selfless’: Yale’s David Swensen dies at 67 | YaleNews

“. . . . No fewer than 15 former members of Swensen’s team have gone on to lead investment offices at other institutions, including, at various times, Princeton, MIT, Stanford, the University of Pennsylvania, the Rockefeller Foundation, Wesleyan University, and Bowdoin College. Some two-thirds of them are women. Smith College recently announced that it had hired Swensen protégé Lisa Howie ’00 B.S., ’08 M.B.A. as its first chief investment officer.

Astonishingly, of the 15 top-ranked endowments based on performance over the past 10 years, six are managed by Yale Investments Office alumni,” said Takahashi, who served as senior director in the Yale Investments Office for 33 years. (He is now the founder and executive director of the Carbon Containment Lab at Yale School of the Environment.)

Teaching was important to Swensen, both in the classroom and in the Investments Office. On Monday, he and Takahashi taught the last spring semester session of their celebrated seminar course, “Investment Analysis.” Swensen, an elected fellow of the American Academy of Arts & Sciences, led discussion of a new case study.

After co-teaching the course for more than two decades, Takahashi said, the pair could “finish each other’s sentences.”

In 2014, when the university presented Swensen with an honorary degree, Polak added two extra words to the formal tribute: “and teacher.”

He was so happy about that,” Polak said. “For years to come he’d remind me that we added those two words.”

Former Vassar College President Catharine B. “Cappy” Hill ’85 Ph.D., the senior trustee of the Yale Board of Trustees, called Swensen “a consummate teacher and university citizen.”

All those who have passed through the investment office, engaged with him through the investment committee of the university, or taken one of his courses have benefited from his enthusiasm for educating and mentoring others. His obvious love for and commitment to Yale contributed to the university in many ways, and will be remembered and valued by all those who had the good fortune to know him.”

Through two books Swensen wrote — “Pioneering Portfolio Management: An Unconventional Approach to Institutional Investment” and “Unconventional Success: A Fundamental Approach to Personal Investment” — he also helped the broader investment community learn his way of thinking.

Source: ‘Self-confident yet selfless’: Yale’s David Swensen dies at 67 | YaleNews

Shareholder Action by Written Consent

“Shareholder action by written consent refers to corporate shareholders’ right to act by written consent instead of a meeting. This type of consent avoids some of the negative characteristics of shareholder meetings. A consent resolution, formally called a Shareholders’ Consent to Action Without Meeting, is a written document that details and validates the procedures taken by shareholders within a corporation without requiring that a meeting occur between shareholders and/or directors.

In general, written shareholder consents require the same number of approval votes as would be required if the shareholder meeting actually occurred. Keep in mind that it’s not necessary for a meeting to actually be in person these days either, as telephone and video meetings are common and may be included as acceptable methods of holding meetings according to a corporation’s bylaws.

Shareholder action by written consent is also known as:

  • Shareholders’ Consent to Action Without Meeting.
  • Notice of Action by Written Consent.
  • Shareholders’ Written Consent to Action.
  • Action by Unanimous Written Consent.”

Source: Shareholder Action by Written Consent

What’s the Recovery Rebate Credit? | Kiplinger

“There’s a new tax credit showing up on the Form 1040 this year: The Recovery Rebate Credit. If you didn’t get a stimulus check – or you only got a partial check – then you certainly want to make sure you check out the credit before you file your 2020 tax return.

The recovery rebate tax credit and stimulus checks are joined at the hip. Both the first ($1,200) and second ($600) stimulus checks were simply advance payments of the credit. So, if the combined total of your two stimulus checks (i.e., advance payments) is less than the recovery rebate credit amount, you may be able to get the difference back on your 2020 tax return in the form of a larger tax refund or a lower tax bill. If your stimulus checks exceeded the amount of the credit, you don’t have to repay the difference. Either way, you win!”

Source: What’s the Recovery Rebate Credit? | Kiplinger

2,596 Trades in One Term: Inside Senator Perdue’s Stock Portfolio – The New York Times

As a member of the Senate’s cybersecurity subcommittee, David Perdue has raised alarms that hackers from overseas pose a threat to U.S. computer networks. Citing a frightening report by a California-based company called FireEye, Mr. Perdue was among the senators who asked this spring that the National Guard prepare to protect against such data breaches.

Not only was the issue important to Mr. Perdue, so was FireEye, a federal contractor that provides malware detection and threat-intelligence services. Beginning in 2016, the senator bought and sold FireEye stock 61 times, at one point owning as much as $250,000 worth of shares in the company.

Along with Senator Kelly Loeffler, a fellow Georgia Republican, Mr. Perdue faces an unusual runoff election in January. With control of the Senate at stake, and amid renewed concern about the potential for conflicts of interest in stock trading by members of Congress, Mr. Perdue’s investment activity — and especially his numerous well-timed trades — has increasingly come into the public glare.

Last week, The New York Times reported that the Justice Department had investigated the senator for possible insider trading in his sale of more than $1 million worth of stock in a financial-analysis firm, Cardlytics. Ultimately, prosecutors declined to bring charges. Other media outlets have revealed several trades in companies whose business dealings fall under the jurisdiction of Mr. Perdue’s committees.

An examination of Mr. Perdue’s stock trading during his six years in office reveals that he has been the Senate’s most prolific stock trader by far, sometimes reporting 20 or more transactions in a single day.

The Times analyzed data compiled by Senate Stock Watcher, a nonpartisan website that aggregates publicly available information on lawmakers’ trading, and found that Mr. Perdue’s transactions accounted for nearly a third of all senators’ trades reported in the past six years. His 2,596 trades, mostly in stocks but also in bonds and funds, roughly equal the combined trading volume of the next five most active traders in the Senate.”

The Black Swan: The Impact of the Highly Improbable – Nassim Nicholas Taleb – Books – Review – By Gregg Easterbrook – The New York Times

Possibly Maybe

By 

“On the eve of the 2006 hurricane season, the National Hurricane Center forecast a “hyperactive” summer and fall, with eight to 10 Atlantic cyclones; instead there were five, smack on the 20th-century average. At the beginning of 2006, The Wall Street Journal forecast a bad year for stocks; the Dow Jones Industrial Average rose 16 percent that year. (Disturbingly, The Journal has forecast a good year for 2007.) The British government recently said climate change could reduce global G.D.P. by 13.8 percent in the first year of the 23rd century. Not by 13.7 percent, not by 13.9 percent — by 13.8 percent. In response to an astronomer’s discovery, The New York Times in 2004 declared that the universe might have a “peaceful end” in “tens of billions of years,” but cautioned that it could not rule out the cosmos’s exploding in a few billion years. Writing of the same discovery, The Washington Post predicted that the demise of the cosmos would require 30 billion years, adding this vital caveat: “It remains impossible to predict the fate of the universe with certainty.” Oh, so we can’t be certain what will happen 30 billion years from now!

The hubris of predictions — and our perpetual surprise when the not-predicted happens — are themes of Nassim Nicholas Taleb’s engaging new book, “The Black Swan.” It concerns the occurrence of the improbable, the power of rare events and the author’s lament that “in spite of the empirical record we continue to project into the future as if we were good at it.” We expect all swans to be white and are shocked when a black swan swims by.

Born in Lebanon in 1960, Taleb lived through a “black swan” when his serene homeland was cast into the chaos of civil war in 1975. After emigrating to the United States, he attended Wharton, then worked on Wall Street; today he is a professor at the University of Massachusetts. Black Monday in 1987, when Wall Street suffered its worst single-day decline in modern history — in a drop that started for no clear reason — was his epiphany. Chance, he realized, has far more influence than we care to admit.

M E R E D I T H F O S T E R – Special Meetings and Consent Solicitations: How the Written-Consent Right Uniquely Empowers Shareholders

MEREDITH FOSTER
Special Meetings and Consent Solicitations:
How the Written-Consent Right Uniquely Empowers
Shareholders

“abstract. Despite a decline in companies’ takeover defenses, provisions barring shareholders
from acting by written consent remain intact. A key reason that these antitakeover provisions persist rests in the widely held view that giving shareholders the right to act by written consent would
not increase their power over the company’s management as long as shareholders already have the
right to call a special meeting. This Note argues that this view is wrong. The written-consent right
does uniquely empower shareholders. That power results not from what the right allows shareholders to do but from what it prevents boards from doing without shareholder consent.”