Why do you think the IPO market is weak and new startups are opting to sell themselves rather than go public? If you were an entrepreneur of a startup, what would you consider in making the decision?
Would you want to serve on a board of directors? Why or why not? Do you know how much board members are paid? Do you know how you could find out? (Hint: Def 14A)
Executives are switching away from options to restricted stock. Why? Is this change in executive compensation a “good” thing for corporate governance? Why or why not?
Are CEOs worth their pay? How would you devise a test to determine an answer to the question? Who will be helped by the new SEC disclosure rule on executive pay? How will they be helped?
Carl Icahn wants Tim Cook (Apple’s CEO) to buyback $150 billion in stock, since Apple has so much liquidity on its balance sheet. Do you agree with Mr. Icahn’s reasoning? If you were Tim Cook, what considerations would you have before agreeing to buy back so much stock?
What is your opinion about corporate insiders selling their firms’ stock before a bankruptcy filing? Should there be changes in laws governing insider sales?
So it appears Blackrock is beginning to exercise its clout more in corporate governance of firms in which it holds equity positions. Why do you think they are becoming more influential now? Is this a good development? For whom?
Suntech (a Chinese manufacturer of solar panels) is going into bankruptcy. Who will have first claims on any remaining assets? Why are the creditors not treated equally? What are the implications for foreign investors?
Google’s Schmidt is selling 42% of his shares. Do you think it matters for investors whether he sells or not? Why do you think it might matter more if the current CEO or CFO were to sell such a large stake?
Describe Michael Dell’s conflict of interest in the buyout of his firm. What could be done to mitigate this conflict? Separately, is going private a good idea to fix Dell’s problems? Why or why not? If it is a good idea, why don’t all firms go private?
The CEO of Citi suddenly resigned. Is there sufficient evidence to conclude that boards are “taking charge”? Is it desirable for boards to be more assertive? Why or why not?
Do managers of firms have a fiduciary responsibility to shareholders to minimize the tax burden? Why or why not? Do you agree with Senator Levin that the tax avoidance efforts of Microsoft and other firms are “shenanigans”? If so, who is to blame, the firm or those who write tax law?
How would making the CFO report directly to the board’s audit committee (rather than to the CEO) improve corporate governance? How would it hurt? Should the idea be pursued or not?
Should directors be liable for bad corporate decisions? Should they have their director compensation tied to firm performance? Whose interest do directors represent, shareholders or managers? Should managers be prevented from serving on their own board of directors?
