David H. Webber

Last updated
David H. Webber
David H Webber.jpg
David H. Webber, Associate Dean for Intellectual Life, Boston University School of Law
Education
Occupation(s)author, law professor
Employer Boston University School of Law

David H. Webber is the author of The Rise of the Working Class Shareholder: Labor's Last Best Weapon and Associate Dean for Intellectual Life at Boston University School of Law, where he writes about shareholder activism and litigation.

Contents

Biography

Webber graduated from Columbia University magna cum laude with a B.A. in history and earned his Juris Doctor from New York University School of Law, [1] where he was an editor for the New York University Law Review. [2] Webber joined the faculty at Boston University School of Law in 2010 and became the Associate Dean for Intellectual Life in July 2019. He also co-teaches a class on Pensions and Capital Stewardship in the Trade Union Program at Harvard Law School. [3] He has appeared on C-SPAN's Book TV [4] Minnesota Public Radio's Marketplace, [5] the David Feldman Show, [6] The David Pakman Show, [7] the Social Europe podcast, [8] and Knowledge@Wharton Business Radio, [9] and written opinion pieces for The New York Times, [10] The Washington Post, [11] and the Los Angeles Times. [12]

Scholarship

The Rise of the Working-Class Shareholder: Labor's Last Best Weapon

In this nonfiction book, Webber argues that public pension plans can use their voice as shareholders, both publicly and privately to individual board members, [13] to influence corporate decision making. He asserts public pension plans are better positioned to do this than other shareholders because they do not have as many conflicts of interest [14] and as long-term shareholders, their interests are aligned with the long-term interests of a company. [15] However, labor may also be able to collaborate with other shareholders to achieve mutually beneficial ends. [13] : 297  Although pension plans have a duty to act in workers' best interests, "Webber makes a good case that there is no logical reason always to define those workers' interests narrowly, as just their future retirement benefits." [14] Where employee contributors' current jobs are threatened by the actions of an wiktionary:investee, it would be in the contributors' best interests to influence the investee's actions even if it ultimately results in a lower return for the pension plan. [15] : 306  Criticism of expanding workers' interests beyond return on investment is that some private sector workers would receive a lower retirement return in order to help other workers in the present. For public retirees receiving defined benefit pensions, taxpayers have to pay the difference if returns are lower due to activist activities. [14]

Webber has identified multiple threats to this kind of shareholder activism, including moves from centrally-managed pension plans to individual 401(k)s and Janus v. American Federation of State, County, and Municipal Employees, Council 31, which held that unions cannot collect fees from non-union members. [16] Webber believes these threats have been championed by Conservatives, [17] including the Koch Brothers, [16] for political gain. A narrow definition of fiduciary duty to the fund, as opposed to the beneficiaries, [15] : 306  under the Employee Retirement Income Security Act of 1974 and state retirement plan laws is another threat. [16] This issue has not yet been taken up by the Supreme Court of the United States. Benjamin Friedman notes, "[w]hat Webber's book presents is not a legal argument but rather an economic and political one, and recent experience suggests that economic and especially political arguments count for a lot in determining what the Justices decide on any given issue before them." [14]

The Rise of the Working-Class Shareholder: Labor's Last Best Weapon has been reviewed in The New York Review of Books, [14] the Financial Times, [18] Forbes, [19] Dissent, [20] Cornell University's Industrial and Labor Relations Review, [17] and Publishers Weekly. [21] Webber's book tour included over 40 stops across the United States, including the Los Angeles Times Festival of Books, [22] as well as talks in Belgium, Portugal, England, and Israel. [23]

A Korean edition of the book was published by Max Media in 2020. [24]

Shareholder activism and litigation

Webber has been invited to speak on shareholder activism by academic institutions, [25] labor groups, and lawyers associations worldwide. [26] He believes shareholder activism is important because corporations are very powerful, and their actions impact everyday citizens just as much as government action. [19]

Webber has also expressed concerns about the possible effects if class actions were not available for shareholder litigation, noting this would create a system where institutional investors could recover for wrongs perpetrated by a corporation, but smaller investors would not pursue relief on their own. [27] He has been critical of the Private Securities Litigation Reform Act, because in determining the most adequate plaintiff, it favors investors with a larger dollar amount interest in the outcome over investors whose interest is a larger percentage of their assets. Webber feels the latter may be more committed to aggressively pursuing economic relief, [28] and has suggested courts should select a representative individual investor to serve as a co-lead plaintiff with a larger institutional investor. [29] He has found that institutional investors, such as Fidelity, Vanguard, and TIAA-CREF often avoid being a lead plaintiff because they are concerned competitors will benefit from the litigation without contributing to the costs. Hedge funds, which also may have extensive resources invested, often avoid being the lead plaintiff because they do not want to be subject to discovery demands that would expose their investing strategies. [30] He has also asserted that when corporations require arbitration of shareholder claims, the goal is to shift the cost-benefit analysis so that it does not seem worthwhile to bring the claim. [31]

Webber has examined data to determine whether pay-to-play impacts which law firms represent pension funds in securities litigation, and found that politically controlled pensions are less likely to seek lead plaintiff appointments than pensions whose board members are also pension beneficiaries. However this study has been criticized for not looking at law firm campaign contributions. Other studies [32] have found a relationship between law firm campaign contributions and their selection as lead counsel by those elected officials. [33]

Mergers and acquisitions

Webber has conducted empirical research into who brings lawsuits to challenge mergers and acquisitions in Delaware, and found pension funds are often the lead plaintiffs in these suits. [34] He also found that when institutional investors are named as the lead plaintiffs, it is more likely that the final price will exceed the initial offer and there are lower attorneys' fees. [35]

Books

Articles

Webber's most-cited articles [36] [37] [38] include:

See also

Related Research Articles

A class action, also known as a class-action lawsuit, class suit, or representative action, is a type of lawsuit where one of the parties is a group of people who are represented collectively by a member or members of that group. The class action originated in the United States and is still predominantly an American phenomenon, but Canada, as well as several European countries with civil law, have made changes in recent years to allow consumer organizations to bring claims on behalf of consumers.

Corporate governance are mechanisms, processes and relations by which corporations are controlled and operated ("governed").

An activist shareholder is a shareholder who uses an equity stake in a corporation to put pressure on its management. A fairly small stake may be enough to launch a successful campaign. In comparison, a full takeover bid is a much more costly and difficult undertaking. The goals of activist shareholders range from financial to non-financial. Shareholder activists can address self-dealing by corporate insiders, although large stockholders can also engage in self-dealing to themselves at the expense of smaller minority shareholders.

An institutional investor is an entity which pools money to purchase securities, real property, and other investment assets or originate loans. Institutional investors include commercial banks, central banks, credit unions, government-linked companies, insurers, pension funds, sovereign wealth funds, charities, hedge funds, REITs, investment advisors, endowments, and mutual funds. Operating companies which invest excess capital in these types of assets may also be included in the term. Activist institutional investors may also influence corporate governance by exercising voting rights in their investments. In 2019, the world's top 500 asset managers collectively managed $104.4 trillion in Assets under Management (AuM).

A proxy fight, proxy contest or proxy battle is an unfriendly contest for control over an organization. The event usually occurs when a corporation's stockholders develop opposition to some aspect of the corporate governance, often focusing on directorial and management positions. Corporate activists may attempt to persuade shareholders to use their proxy votes to install new management for any of a variety of reasons. Shareholders of a public corporation may appoint an agent to attend shareholder meetings and vote on their behalf. That agent is the shareholder's proxy.

The Private Securities Litigation Reform Act of 1995, Pub. L. 104–67 (text)(PDF), 109 Stat. 737 ("PSLRA") implemented several substantive changes in the United States that have affected certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation, and awards fees and expenses.

A proxy statement is a statement required of a firm when soliciting shareholder votes. This statement is filed in advance of the annual meeting. The firm needs to file a proxy statement, otherwise known as a Form DEF 14A, with the U.S. Securities and Exchange Commission. This statement is useful in assessing how management is paid and potential conflict of interest issues with auditors.

John C. Coffee Jr. is the Adolf A. Berle Professor of Law and director of the Center on Corporate Governance at Columbia Law School.

Milberg LLP is a US plaintiffs' law firm, established in 1965 and based in New York City. It has mounted many class action cases on behalf of investors, and has been recognized as among the leading firms in its field by the National Law Journal, RiskMetrics Group, Securities Class Action Services, and Law360. The firm and some of its partners were charged in 2006 with offering improper inducements to plaintiffs. The case against the firm itself was dismissed in 2008, but that same year four partners pleaded guilty to charges, and many others had already left the firm.

<span class="mw-page-title-main">Socially responsible investing</span> Any investment strategy combining both financial performance and social/ethical impact.

Socially responsible investing (SRI), social investment, sustainable socially conscious, "green" or ethical investing, is any investment strategy which seeks to consider both financial return and social/environmental good to bring about social change regarded as positive by proponents. Socially responsible investments often constitute a small percentage of total funds invested by corporations and are riddled with obstacles.

With respect to public companies in the United States, a shareholder resolution is a proposal submitted by shareholders for a vote at the company's annual meeting. Typically, resolutions are opposed by the corporation's management, hence the insistence for a vote. "Voting has long been recognized as one of the primary rights of shareholders." For publicly held corporations in the United States, the submission and handling of resolutions is regulated by the Securities and Exchange Commission (SEC).

<span class="mw-page-title-main">United States corporate law</span> Overview of United States corporate law

United States corporate law regulates the governance, finance and power of corporations in US law. Every state and territory has its own basic corporate code, while federal law creates minimum standards for trade in company shares and governance rights, found mostly in the Securities Act of 1933 and the Securities and Exchange Act of 1934, as amended by laws like the Sarbanes–Oxley Act of 2002 and the Dodd–Frank Wall Street Reform and Consumer Protection Act. The US Constitution was interpreted by the US Supreme Court to allow corporations to incorporate in the state of their choice, regardless of where their headquarters are. Over the 20th century, most major corporations incorporated under the Delaware General Corporation Law, which offered lower corporate taxes, fewer shareholder rights against directors, and developed a specialized court and legal profession. Nevada has attempted to do the same. Twenty-four states follow the Model Business Corporation Act, while New York and California are important due to their size.

Grant & Eisenhofer P.A. is an American law firm that specializes in complex litigation and arbitration, particularly in the areas of securities, antitrust, and shareholder rights. The firm was founded in 1996 by Jay Eisenhofer and Stuart Grant and has offices in Wilmington, Delaware and New York City. Grant & Eisenhofer has represented clients in a number of high-profile cases, including the Enron shareholder litigation and the WorldCom shareholder litigation.

Environmental, social, and corporate governance (ESG), also known as environmental, social, governance, is an approach to investing that recommends taking environmental issues, social issues and governance issues into account when deciding which companies to invest in.

<span class="mw-page-title-main">Legal Alpha</span>

Legal Alpha is the extra performance generated in a specific, diversified investment portfolio by using opportunistic and selective legal activism to obtain compensation for under-performance related to legally relevant unforeseen and uncontrollable circumstances.

<span class="mw-page-title-main">Institutional Shareholder Services</span> Proxy advisory firm

Institutional Shareholder Services Inc. (ISS) is a proxy advisory firm. Hedge funds, mutual funds and similar organizations that own shares of multiple companies pay ISS to advise regarding share holder votes. It is the largest such firm, with over 61 percent of the business.

Roberta Romano is Sterling Professor of Law at the Yale Law School. She is the first woman at Yale Law School to be named a Sterling Professor. Roberta Romano joined the Yale Law School faculty as a professor of law in 1985. She was named the Allen Duffy/Class of 1960 Professor of Law in 1991 and the Oscar M. Ruebhausen Professor of Law in 2005. She is Director of the Yale Law School Center for the Study of Corporate Law and Professor at the Yale School of Management.

A securities class action (SCA), or securities fraud class action, is a lawsuit filed by investors who bought or sold a company's publicly traded securities within a specific period of time and suffered economic injury as a result of violations of the securities laws.

Robbins Geller Rudman & Dowd LLP is an American law firm headquartered in San Diego, California. It is a plaintiffs law firm specializing in securities litigation and shareholder rights cases.

Labaton Sucharow is an American plaintiffs' law firm. Founded in 1963, the firm employees over 60 lawyers in offices in New York, Delaware, and Washington, D.C. The firm is known for exposing corporate misconduct and has recovered billions of dollars on behalf of investors and consumers.

References

  1. ↑ "Bookshelf". Columbia College Today. 2019-12-06. Retrieved 2022-05-31.
  2. ↑ "New York University Law Review: Members of the Law Review 2000-2001" (PDF). Retrieved 8 November 2019.
  3. ↑ "Harvard Trade Union Program Faculty". Labor and Worklife Program: A Program of the Harvard Law School. Retrieved 8 November 2019.
  4. ↑ "Author Discussion on Labor". C-SPAN. Retrieved 8 November 2019.
  5. ↑ Gura, David (10 January 2013). "California teacher pension fund to sell gun investments". Marketplace. Minnesota Public Radio. Retrieved 8 November 2019.
  6. ↑ "Time to Dis Barr, Episode 1036". The David Feldman Show. 4 May 2019. Retrieved 5 December 2019.
  7. ↑ "Press Briefing: Why Should We Believe Anything You Say?". The David Pakman Show. 27 March 2018. Retrieved 5 December 2019.
  8. ↑ "David Webber: The Rise of the Working Class Shareholder". YouTube. Social Europe. Retrieved 5 February 2020.
  9. ↑ Loney, Dan; Webber, David. "Corporate Voter Suppression". SoundCloud. Retrieved 8 November 2019.
  10. ↑ Webber, David (5 March 2018). "The Real Reason the Investor Class Hates Pensions". The New York Times. Retrieved 8 November 2019.
  11. ↑ Webber, David H. (13 April 2017). "Big corporations are trying to silence their own shareholders". The Washington Post. Retrieved 8 November 2019.
  12. ↑ Webber, David (6 May 2018). "Op-Ed: California's most powerful voice on Wall Street? Its pensions". Los Angeles Times. Retrieved 8 November 2019.
  13. 1 2 Partnoy, Frank (2019). "Webber's Best Weapon: Working-Class Shareholders as David to Corporate Management's Goliath" (PDF). Boston University Law Review. 99: 293, 295. Retrieved 13 November 2019.
  14. 1 2 3 4 5 Friedman, Benjamin M. "Labor's Last Hope?" . The New York Review of Books. Retrieved 8 November 2019. (Reviewing David Webber, The Rise of the Working-Class Shareholder: Labor's Last Best Weapon (Harvard University Press, 2018)).
  15. 1 2 3 Greenfield, Kent (2019). "The Rise of the Working Class Shareholder: An Application, an Extension, and a Challenge". Boston University Law Review. 99 (1): 305–06. Retrieved 13 November 2019.
  16. 1 2 3 Odessky, Jared (11 March 2019). "Review of The Rise of the Working-Class Shareholder". On Labor. Harvard Law School. Retrieved 8 November 2019.
  17. 1 2 Hebb, Tessa (1 January 2019). "Book Review: The Rise of the Working-Class Shareholder: Labor's Last Best Weapon". ILR Review. 72 (1): 257. doi: 10.1177/0019793918804813 . S2CID   158963960.
  18. ↑ Indap, Sujeet (18 December 2018). "Union Pension Cash Shakes Fist for Value and Social Priorities" . Financial Times. Retrieved 5 December 2019.
  19. 1 2 Alsin, Arne (30 August 2018). "Too Many Corporations Act for the Short-Term. That Should Change". Forbes. Retrieved 8 November 2019.
  20. ↑ Davis, Owen. "All Roads Lead to Wall Street". Dissent. Retrieved 5 December 2019.
  21. ↑ "The Rise of the Working-Class Shareholder: Labor's Last Best Weapon". Publishers Weekly. April 2018. Retrieved 5 December 2019.
  22. ↑ "LA Times Festival of Books 2018". SCHED. Retrieved 5 December 2019.
  23. ↑ "David H. Webber Book Tour". Boston University School of Law. Retrieved 5 December 2019.
  24. ↑ "The Rise of the Working-Class Shareholder". Max Education. Retrieved 18 December 2020.
  25. ↑ "BCLB Leadership Lunch Talk: David Webber; Boston University School of Law — The Rise of the Working-Class Shareholder". BerkeleyLaw: University of California. Retrieved 8 November 2019.
  26. ↑ "David H. Webber Book Tour". Boston University School of Law. Retrieved 8 November 2019.
  27. ↑ Fitzpatrick, Brian T. (2015). "The End of Class Actions" . Arizona Law Review. 57 (1): 191, n. 138. Retrieved 14 November 2019. (Citing David Webber, Shareholder Litigation Without Class Actions, 57 Ariz. L. Rev. 201, 217 (2015)).
  28. ↑ Hamermesh, Lawrence A. (Fall 2016). "A Most Adequate Response to Excessive Shareholder Litigation" (PDF). Hofstra Law Review. 45 (1): 164–65. Retrieved 14 November 2019.
  29. ↑ Rose, Amanda M. (26 September 2019). "Cutting Class Action Agency Costs: Lessons from the Public Company". p. 53, n. 196. SSRN   3460585.
  30. ↑ Hylton, Keith N. (December 2018). "Deterrence and Aggregate Litigation". Boston University School of Law, Law & Economics Paper (17–45): 21–22. SSRN   3460585 . Retrieved 15 November 2019. (Citing David H. Webber, Shareholder Litigation Without Class Actions, 57 Ariz. L. Rev. 201 (2015)).
  31. ↑ Edwards, Benjamin P. (Winter 2018). "Arbitration's Dark Shadow". Nevada Law Journal. 18 (2): 429, n. 17. Retrieved 14 November 2019.
  32. ↑ Johnson-Skinner, D.T. (2009). "Paying to Play in Securities Class Actions: A Look at Lawyers' Campaign Contributions". New York University Law Review. 84: 1725–55.
  33. ↑ Perino, Michael (2014). "Have Institutional Fiduciaries Improved Securities Class Actions? A Review of the Empirical Literature on the PSLRA's Lead Plaintiff Provision" . In Hawley, James P.; Hoepner, Andreas G. F.; Johnson, Keith L.; Sandberg, Joakim; Waitzer, Edward J. (eds.). Cambridge Handbook of Institutional Investment and Fiduciary Duty. Cambridge University Press. p. 155. doi:10.1017/CBO9781139565516.015. ISBN   9781139565516. S2CID   27041309 . Retrieved 15 November 2019.
  34. ↑ Strine Jr., Leo E. (April 2017). "Who Bleeds When the Wolves Bite: A Flesh-and-Blood Perspective on Hedge Fund Activism and Our Strange Corporate Governance System" (PDF). Yale Law Journal. 126 (6): 1917, n. 163. Retrieved 13 November 2019. (Citing David H. Webber, Private Policing of Mergers and Acquisitions: An Empirical Assessment of Institutional Lead Plaintiffs in Transactional Class and Derivative Actions, 38 Del. J. Corp. L. 907, 960-61 (2014)).
  35. ↑ Kaufman, Michael J.; Wunderlich, John M. (Summer 2015). "The Bromberg Balance: Proper Portfolio-Monitoring Agreements in Securities Class Actions". SMU Law Review. 68 (3): 774, n. 17. Retrieved 13 November 2019. (Citing David H. Webber, Private Policing of Mergers and Acquisitions: An Empirical Assessment of Institutional Lead Plaintiffs in Transactional Class and Derivative Actions, 38 Del. J. Corp. L. 907, 979-80 (2014)).
  36. ↑ "David H. Webber". Google Scholar. Retrieved 8 November 2019.
  37. ↑ "Webber, David". HeinOnline. Retrieved 13 November 2019.. Subscription needed.
  38. ↑ "Webber, David H." Web of Science. Clarivate Analytics. Archived from the original on 29 May 2020. Retrieved 13 November 2019.. Subscription needed.
  39. ↑ Barzuza, Michal; Curtis, Quinn; Webber, David H. (February 2021). "Shareholder Value(s): Index Fund ESG Activism and the New Millennial Corporate Governance". Southern California Law Review. 93 (6): 1243. Retrieved 12 May 2021.
  40. ↑ "Subramanian, Barzuza, other Harvard Law affiliates recognized by Corporate Practice Commentator". Harvard Law Today. 6 May 2021. Retrieved 12 May 2021.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.