Investor Relations Week: Cybercrime Reporting Act, Small-Cap Biotech Companies at 15-Year Lows, and GE Executive Pay Cuts
– US President Joe Biden has signed into law a law requiring key companies to report to the government when they have been hacked, the Wall StreetJnewspaper (paywall) reported. The idea, which has been long delayed due to industry pushback, could fix a fundamental problem the US government faces in its fight against cybercriminals: No one knows how many businesses are under attack. But the wording of the law does not specify what it will require of corporate security teams and federal civilian agencies, as well as the businesses that will be affected.
– Small-cap biotech companies are on course for the worst 12 months in more than 15 years against their large-cap counterparts, according to analysts at Raymond James and reported by MarketWatch. Small-cap biotechs have seemingly outperformed large-cap biotechs in just one month – August – of the past 12. “The current confluence of factors negatively impacting the biotech sector has been staggering,” the analysts wrote in a note. “Quantitative factors in the biotech sector suggest that we are at a cyclical low matched only by the [global financial crisis].’
– Larry Culp, chairman and CEO of General Electric, has agreed to cut his stock incentive grant for this year by two-thirds, the report reported. Financialtimes (pay wall). His potential $230 million compensation deal was rejected by investors last year, and the newspaper said Culp and GE’s board compensation committee had agreed to the $15 annual grant reduction. million to $5 million “in response to shareholder feedback,” according to a proxy. filing prior to the company’s annual meeting on May 4.
– In other executive compensation news, Moderna CEO Stephane Bancel has sold $408 million of company stock since the start of the coronavirus pandemic – averaging about $3.6 million dollars a week – as the company’s shares soared on the development and rollout of its Covid vaccine, according to CNBCanalysis of the company’s securities deposits. Bancel’s sales were executed under the SEC’s 10b5-1 rule, which was enacted to prevent insider trading, although the outlet said that “critics argue that the rules governing 10b5- 1 lack transparency and that the rules governing them are too lax”.
– Activist shareholders seeking undervalued or underperforming companies may find an exceptionally target-rich environment among special purpose acquisition companies (Spacs) that have completed M&A deals in recent years. years, wrote Bruce Goldfarb of Okapi Partners on Forbes. But while he said there was now evidence “of a growing wave of activism that could engulf de-Spac-ed companies”, Goldfarb also warned that “the success of Spac-tivism, as it’s called now, won’t be as easy as it looks.” on the surface. Nothing worth doing is ever that easy.”
– The FT reported that chief executives of some of Japan’s biggest companies have called on the government to reclassify Covid-19 as endemic and lift some of Asia’s toughest pandemic restrictions to help release two years of pent-up demand for mergers and cross-border acquisitions. Their push comes as bankers and senior M&A lawyers say they expect a surge in proposed deals after a ‘golden week’ of public holidays in early May as Japanese companies embark on the acquisition road. world.
– According to Reuters, the UK government-backed Parker Review Board, which was set up to improve board diversity, said most large companies in the UK now have at least one member from a ethnic minority. “Our December 2021 target of every FTSE 100 company with at least one ethnic minority director has been nearly met,” said Committee Chairman John Parker. “We have also secured commitments from many outstanding companies, meaning it is likely that around 97% of current FTSE 100 companies will meet the target by mid-year.”
Last year the number of FTSE 100 companies to meet the voluntary target rose from 74 to 89, and five more had done so by March 2022. Three have committed to do so and are in advanced stages recruitment.
– According to CNBC, Shell’s board is being sued for allegedly failing to prepare the oil and gas company for the transition from fossil fuels. Environmental law firm ClientEarth, a Shell shareholder, said it had notified Shell of its complaint against the company’s 13 executive and non-executive directors. He argues that the council’s failure to deliver a climate strategy that truly aligns with the landmark Paris Agreement is a breach of its obligations under English law. The case is believed to mark the first-ever attempt to hold a company’s board personally responsible “for failing to properly prepare for the transition to net zero”.
“Shell is seriously exposed to the physical and transitory risks of climate change, but its climate plan is fundamentally flawed,” said Paul Benson, an attorney for ClientEarth, in a statement. “The longer the board delays, the more likely the company will have to execute a sharp ‘handbrake ride’ to maintain business competitiveness and meet the challenges of inevitable regulatory changes.”
In response to the legal action, Shell said it was implementing its global strategy which supported the Paris climate accord. This includes plans to transform its business “to deliver more low-carbon energy to customers,” the company said.
“Tackling a challenge as big as climate change requires action from all sides. The energy supply challenges we are seeing underscore the need for effective government-led policies to address critical needs such as energy security while decarbonizing our energy system,” a Shell spokesperson said. “These challenges cannot be resolved through litigation.”
– Reuters reported that Democratic SEC member Allison Herren Lee plans to leave the agency after her term ends in June, but will remain in the role until a successor is named. “My term as commissioner expires in June of this year and I have notified President Biden of my intention to step down from the commission once my successor is confirmed,” Lee said.
His departure will come as the agency grapples with an agenda of rule changes that would affect public companies, brokerages, Wall Street banks and investment funds. The SEC would still retain a 2-1 Democratic majority as it still awaits a replacement for the empty Republican seat vacated by former commissioner Elad Roisman in January.
In January 2021, Lee began serving as the agency’s acting president until Gary Gensler was sworn in. and ESG. “She launched ground-breaking ESG initiatives across the SEC, including issuing a request for public information on climate risk disclosure, asking the review unit to focus more on ESG and helping to shine a light on how investor money gets voted on in corporate elections. ‘