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

Consequences to directors of shareholder activism

Working Paper 14-071</p

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 &quot;long-term&quot; 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

Countering Ballot Stuffing and Incorporating Eligibility Verifiability in Helios

Helios is a web-based end-to-end verifiable electronic voting system which has been said to be suitable for low-coercion environments. Although many Internet voting schemes have been proposed in the literature, Helios stands out for its real world relevance. It has been used in a number of elections in university campuses around the world and it has also been used recently by the IACR to elect its board members. It was noted that a dishonest server in Helios can stuff ballots and this seems to limit the claims of end-to-end verifiability of the system. In this work, we investigate how the issue of ballot stuffing can be addressed with minimum change to the current vote casting experience in Helios and we argue formally about the security of our techniques. Our ideas are intuitive and general enough to be applied in the context of other Internet voting scheme and they also address recent attacks exploiting the malleability of ballots in Helios

Organic aerosol formation downwind from the Deepwater Horizon oil spill.

A large fraction of atmospheric aerosols are derived from organic compounds with various volatilities. A National Oceanic and Atmospheric Administration (NOAA) WP-3D research aircraft made airborne measurements of the gaseous and aerosol composition of air over the Deepwater Horizon (DWH) oil spill in the Gulf of Mexico that occurred from April to August 2010. A narrow plume of hydrocarbons was observed downwind of DWH that is attributed to the evaporation of fresh oil on the sea surface. A much wider plume with high concentrations of organic aerosol (&gt;25 micrograms per cubic meter) was attributed to the formation of secondary organic aerosol (SOA) from unmeasured, less volatile hydrocarbons that were emitted from a wider area around DWH. These observations provide direct and compelling evidence for the importance of formation of SOA from less volatile hydrocarbons

Spectral Line-by-Line Pulse Shaping of an On-Chip Microresonator Frequency Comb

We report, for the first time to the best of our knowledge, spectral phase characterization and line-by-line pulse shaping of an optical frequency comb generated by nonlinear wave mixing in a microring resonator. Through programmable pulse shaping the comb is compressed into a train of near-transform-limited pulses of \approx 300 fs duration (intensity full width half maximum) at 595 GHz repetition rate. An additional, simple example of optical arbitrary waveform generation is presented. The ability to characterize and then stably compress the frequency comb provides new data on the stability of the spectral phase and suggests that random relative frequency shifts due to uncorrelated variations of frequency dependent phase are at or below the 100 microHertz level.Comment: 18 pages, 4 figure

The origin of large molecules in primordial autocatalytic reaction networks

Large molecules such as proteins and nucleic acids are crucial for life, yet their primordial origin remains a major puzzle. The production of large molecules, as we know it today, requires good catalysts, and the only good catalysts we know that can accomplish this task consist of large molecules. Thus the origin of large molecules is a chicken and egg problem in chemistry. Here we present a mechanism, based on autocatalytic sets (ACSs), that is a possible solution to this problem. We discuss a mathematical model describing the population dynamics of molecules in a stylized but prebiotically plausible chemistry. Large molecules can be produced in this chemistry by the coalescing of smaller ones, with the smallest molecules, the `food set', being buffered. Some of the reactions can be catalyzed by molecules within the chemistry with varying catalytic strengths. Normally the concentrations of large molecules in such a scenario are very small, diminishing exponentially with their size. ACSs, if present in the catalytic network, can focus the resources of the system into a sparse set of molecules. ACSs can produce a bistability in the population dynamics and, in particular, steady states wherein the ACS molecules dominate the population. However to reach these steady states from initial conditions that contain only the food set typically requires very large catalytic strengths, growing exponentially with the size of the catalyst molecule. We present a solution to this problem by studying `nested ACSs', a structure in which a small ACS is connected to a larger one and reinforces it. We show that when the network contains a cascade of nested ACSs with the catalytic strengths of molecules increasing gradually with their size (e.g., as a power law), a sparse subset of molecules including some very large molecules can come to dominate the system.Comment: 49 pages, 17 figures including supporting informatio

Particle creation rate for dynamical black holes

We present the particle creation probability rate around a general black hole as an outcome of quantum fluctuations. Using the uncertainty principle for these fluctuation, we derive a new ultraviolet frequency cutoff for the radiation spectrum of a dynamical black hole. Using this frequency cutoff, we define the probability creation rate function for such black holes. We consider a dynamical Vaidya model, and calculate the probability creation rate for this case when its horizon is in a slowly evolving phase. Our results show that one can expect the usual Hawking radiation emission process in the case of a dynamical black hole when it has a slowly evolving horizon. Moreover, calculating the probability rate for a dynamical black hole gives a measure of when Hawking radiation can be killed off by an incoming flux of matter or radiation. Our result strictly suggests that we have to revise the Hawking radiation expectation for primordial black holes that have grown substantially since they were created in the early universe. We also infer that this frequency cut off can be a parameter that shows the primordial black hole growth at the emission moment.Comment: 10 pages, 1 figure. The paper was rewritten in more clear presentation and one more appendix is adde

Coherent coupling between radio frequency, optical, and acoustic waves in piezo-optomechanical circuits

The interaction of optical and mechanical modes in nanoscale optomechanical systems has been widely studied for applications ranging from sensing to quantum information science. Here, we develop a platform for cavity optomechanical circuits in which localized and interacting 1550 nm photons and 2.4 GHz phonons are combined with photonic and phononic waveguides. Working in GaAs facilitates manipulation of the localized mechanical mode either with a radio frequency field through the piezo-electric effect, or optically through the strong photoelastic effect. We use this to demonstrate a novel acoustic wave interference effect, analogous to coherent population trapping in atomic systems, in which the coherent mechanical motion induced by the electrical drive can be completely cancelled out by the optically-driven motion. The ability to manipulate cavity optomechanical systems with equal facility through either photonic or phononic channels enables new device and system architectures for signal transduction between the optical, electrical, and mechanical domains