Activist Directors: Determinants and Consequences

This paper examines the determinants and consequences of hedge fund activism with a focus on activist directors, i.e., those directors appointed in response to demands by activists. Using a sample of 1,969 activism events over the period 2004–2012, we identify 824 activist directors. We find that activists are more likely to gain board seats at smaller firms and those with weaker stock price performance. Activists remain as shareholders longer when they have board seats, with holding periods consistent with conventional notions of “long-term” institutional investors. As in prior research, we find positive announcement-period returns of around 4–5% when a firm is targeted by activists, and a 2% increase in return on assets over the subsequent one to five years. We find that activist directors are associated with significant strategic and operational actions by firms. We find evidence of increased divestiture, decreased acquisition activity, higher probability of being acquired, lower cash balances, higher payout, greater leverage, higher CEO turnover, lower CEO compensation, and reduced investment. With the exception of the probability of being acquired, these estimated effects are generally greater when activists obtain board representation, consistent with board representation being an important mechanism for bringing about the kinds of changes that activists often demand

The Efficacy of Shareholder Voting: Evidence From Equity Compensation Plans

This study examines the effects of shareholder support for equity compensation plans on subsequent CEO compensation. Using cross-sectional regression, instrumental variable, and regression discontinuity research designs, we find little evidence that either lower shareholder voting support for, or outright rejection of, proposed equity compensation plans leads to decreases in the level or composition of future CEO incentive compensation. We also find that, in cases where the equity compensation plan is rejected by shareholders, firms are more likely to propose, and shareholders are more likely to approve, a plan the following year. Our results suggest that shareholder votes for equity pay plans have little substantive impact on firms’ incentive compensation policies. Thus, recent regulatory efforts aimed at strengthening shareholder voting rights, particularly in the context of executive compensation, may have limited effect on firms’ compensation policies

Why Do Pro Forma and Street Earnings not Reflect Changes in GAAP? Evidence From SFAS 123R

This study examines how key market participants—managers and analysts—responded to SFAS 123R’s controversial requirement that firms recognize stock-based compensation expense. Despite mandated recognition of the expense, some firms’ managers exclude it from pro forma earnings and some firms’ analysts exclude it from Street earnings. We find evidence consistent with managers opportunistically excluding the expense to increase earnings, smooth earnings, and meet earnings benchmarks but no evidence that these exclusions result in an earnings measure that better predicts future firm performance. In contrast, we find that analysts exclude the expense from earnings forecasts when exclusion increases earnings’ predictive ability for future performance and that opportunism generally does not explain exclusion by analysts incremental to exclusion by managers. Thus our findings indicate that opportunism is the primary explanation for exclusion of the expense from pro forma earnings and predictive ability is the primary explanation for exclusion from Street earnings. Our findings suggest the controversy surrounding the recognition of stock-based compensation expense may be attributable to cross-sectional variation in the relevance of the expense for equity valuation, as well as to differing incentives of market participants

Activist directors: Determinants and consequences

Abstract This paper examines the determinants and consequences of hedge fund activism with a focus on activist directors, i.e., those directors appointed in response to demands by activists. Using a sample of 1,969 activism events over the period 2004-2012, we identify 824 activist directors. We find that activists are more likely to gain board seats at smaller firms and those with weaker stock price performance. Activists remain as shareholders longer when they have board seats, with holding periods consistent with conventional notions of "long-term" institutional investors. As in prior research, we find positive announcement-period returns of around 4-5% when a firm is targeted by activists, and a 2% increase in return on assets over the subsequent one to five years. We find that activist directors are associated with significant strategic and operational actions by firms. We find evidence of increased divestiture, decreased acquisition activity, higher probability of being acquired, lower cash balances, higher payout, greater leverage, higher CEO turnover, lower CEO compensation, and reduced investment. With the exception of the probability of being acquired, these estimated effects are generally greater when activists obtain board representation, consistent with board representation being an important mechanism for bringing about the kinds of changes that activists often demand

Profiles of physical, emotional and psychosocial wellbeing in the Lothian birth cohort 1936

<p>Abstract</p> <p>Background</p> <p>Physical, emotional, and psychosocial wellbeing are important domains of function. The aims of this study were to explore the existence of separable groups among 70-year olds with scores representing physical function, perceived quality of life, and emotional wellbeing, and to characterise any resulting groups using demographic, personality, cognition, health and lifestyle variables.</p> <p>Methods</p> <p>We used latent class analysis (LCA) to identify possible groups.</p> <p>Results</p> <p>Results suggested there were 5 groups. These included High (n = 515, 47.2% of the sample), Average (n = 417, 38.3%), and Poor Wellbeing (n = 37, 3.4%) groups. The two other groups had contrasting patterns of wellbeing: one group scored relatively well on physical function, but low on emotional wellbeing (Good Fitness/ Low Spirits,n = 60, 5.5%), whereas the other group showed low physical function but relatively well emotional wellbeing (Low Fitness/Good Spirits, n = 62, 5.7%). Salient characteristics that distinguished all the groups included smoking and drinking behaviours, personality, and illness.</p> <p>Conclusions</p> <p>Despite there being some evidence of these groups, the results also support a largely one-dimensional construct of wellbeing in old age—for the domains assessed here—though with some evidence that some individuals have uneven profiles.</p

An Expert Consensus Framework for Asthma Remission as a Treatment Goal

With novel therapies in development, there is an opportunity to consider asthma remission as a treatment goal. In this Rostrum, we present a generalized framework for clinical and complete remission in asthma, on and off treatment, developed on the basis of medical literature and expert consensus. A modified Delphi survey approach was used to ascertain expert consensus on core components of asthma remission as a treatment target. Phase 1 identified other chronic inflammatory diseases with remission definitions. Phase 2 evaluated components of those definitions as well as published definitions of spontaneous asthma remission. Phase 3 evaluated a remission framework created using consensus findings. Clinical remission comprised 12 or more months with (1) absence of significant symptoms by validated instrument, (2) lung function optimization/stabilization, (3) patient/provider agreement regarding remission, and (4) no use of systemic corticosteroids. Complete remission was defined as clinical remission plus objective resolution of asthma-related inflammation and, if appropriate, negative bronchial hyperresponsiveness. Remission off treatment required no asthma treatment for 12 or more months. The proposed framework is a first step toward developing asthma remission as a treatment target and should be refined through future research, patient input, and clinical study

Characterising the impact of sex on severe asthma (SA) in the UK Severe Asthma Registry (UKSAR)

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The impact of sex on severe asthma: a cross-sectional retrospective analysis of UK primary and specialist care:a cross-sectional retrospective analysis of UK primary and specialist care

After puberty, females are more likely to develop asthma and in a more severe form than males. The associations between asthma and sex are complex with multiple intrinsic and external factors. To evaluate the sex differences in the characteristics and treatment of patients with severe asthma (SA) in a real-world setting. Demographic, clinical and treatment characteristics for patients with SA in the UK Severe Asthma Registry (UKSAR) and Optimum Patient Care Research Database (OPCRD) were retrospectively analysed by sex using univariable and multivariable logistic regression analyses adjusted for year, age and hospital/practice. 3679 (60.9% female) patients from UKSAR and 18 369 patients (67.9% female) from OPCRD with SA were included. Females were more likely to be symptomatic with increased Asthma Control Questionnaire-6 (UKSAR adjusted OR (aOR) 1.14, 95% CI 1.09 to 1.18) and Royal College of Physicians-3 Question scores (OPCRD aOR 1.29, 95% CI 1.13 to 1.47). However, they had a higher forced expiratory volume in 1 second per cent (FEV %) predicted (UKSAR 68.7% vs 64.8%,

Nature of b-1,3-Glucan-Exposing Features on Candida albicans Cell Wall and Their Modulation

Funding Information: This work was supported by a programme grant from the UK Medical Research Council (MR/M026663/1; MR/M026663/2) and by the Medical Research Council Centre for Medical Mycology (MR/N006364/1; MR/N006364/2). NARG acknowledges Wellcome support for a Senior Investigator (101873/Z/13/Z), Collaborative (200208/A/15/Z; 215599/Z/19/Z) and Strategic Awards (097377/Z11/Z). MGN was supported by an ERC Advanced Grant (833247) and a Spinoza Grant of the Netherlands Organization for Scientific Research.Peer reviewedPublisher PD