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Steve Bainbridge
Interests: Law, corporate governance, economics, politics, religion, education, books, food, and wine
Recent Activity
From the UCLA Faculty Association: Grading has emerged as a flash point of discord at law schools amid the coronavirus pandemic, with students and faculty pushing administrators to choose between traditional grades and a pass/fail system. The University of Chicago Law School on Tuesday became the first among the top 10 schools, as ranked by U.S. News & World Report, to tell students that it plans to stick with its traditional grading scale for the spring semester, instead of moving to pass/fail grading. That decision comes in contrast to a growing number of elite schools that have already committed to... Continue reading
Posted yesterday at
From the UCLA Faculty Association: A barrage of vulgar words and messages interrupted several UCLA classes held Tuesday on the video conference application Zoom. “Zoombombing”, a new type of internet trolling, occurs when an individual or a group of individuals use Zoom features to interrupt a meeting or class. Following the cancellation of in-person classes due to the novel coronavirus outbreak, many professors have been using Zoom to hold classes, discussions, labs and office hours. Continue reading
Posted yesterday at
In re the strikes at #Instacart and #Amazon: my take on unions and strikes. It may surprise you. #InstacartStrike #AmazonStrike — Professor Bainbridge (@ProfBainbridge) March 30, 2020 Continue reading
Posted 3 days ago at
Knust, Lucas and Oesch, David, On the Consequences of Mandatory CEO Pay Ratio Disclosure (February 17, 2020). Available at SSRN: or We examine the consequences of the highly anticipated and controversial Section 953(b) of the Dodd-Frank Act, which mandates companies to disclose the CEO-to-median employee pay ratio starting from 2018. We address endogeneity concerns by using a regression discontinuity design around the public float of companies. Contrary to one of the main arguments of the supporters of the rule, the disclosure requirement does not reduce CEO compensation. We also find no evidence that investors are substantially influenced by... Continue reading
Posted 6 days ago at
You can find one here. There's a second list sorted by US News ranks here. Continue reading
Posted Mar 25, 2020 at
M&A: "Auctions are accelerating in case conditions worsen. Sellers are choosing cash upfront over higher offers; and they’re doing it all over video chat while pets and children roam in the background." #MnA— Grace Maral Burnett (@BurnettGraceM) March 24, 2020 Continue reading
Posted Mar 24, 2020 at
I've just finished a short piece on Salzberg v. Sciabacucchi, (Del. Mar. 18, 2020), for the Washington Legal Foundation. Ann Lipton has written a lot on the issues involved and her initial blog post on the case is well worth reading. As somebody who is generally regarded as a nexus of contracts fellow, I was particularly struck by her discussion of the prominent ways in which corporate theory has featured in the litigation: I think the contrast between the Supreme Court and Chancery decisions as a matter of corporate theory are quite striking. The Chancery decision is a fairly stark... Continue reading
Posted Mar 24, 2020 at
From Twitter: The trending hashtag #BailOutPeopleNotCorporations is founded on a basic error; namely, reification. While it may be necessary to reify the corporation for semantic convenience, it can mislead. Conceptually, the corporation is not a thing, but rather simply a set of contracts between various persons pursuant to which services are provided and rights with respect to a set of assets are allocated. When we "bail out" a corporation, what we're really doing is redirected wealth from taxpayers as a whole to the subset of individuals who collectively make up the corporation. We thus have to make a decision: In... Continue reading
Posted Mar 23, 2020 at
In my Mergers and Acquisitions class, we discuss a material adverse effect clause that reads as follows: "Company Material Adverse Effect" means any event, occurrence, fact, condition or change that is, or would reasonably be expected to become, individually or in the aggregate, materially adverse to (i) the business, results of operations, prospects, condition (financial or otherwise), or assets of the Company and its Subsidiaries, taken as a whole, or (ii) the ability of the Company to consummate the transactions contemplated hereby on a timely basis; provided, however, that, for the purposes of clause (i), a Company Material Adverse Effect... Continue reading
Posted Mar 23, 2020 at
JW Verret's article on the STOCK Act got noticed by Trader's Magazine. Kudos. Continue reading
Posted Mar 22, 2020 at
The Business Roundtable's August 2019 statement on corporate purpose was hailed a signal that corporate CEOs had embraced a kinder, gentler capitalism in which the executives and the company's stakeholders would sit around singing Kum Bay Yah. According to an article in this week's The Economist, however: The latest data on incentives suggest shareholders come first. The 20 [BRT-member] firms’ [studied in a paper by Lucian Bebchuk and Roberto Tallarita] non-executive directors earn an average 56% of their compensation in the form of equity stakes, which are by definition driven by shareholder value; 87-95% of their bosses’ pay is tied... Continue reading
Posted Mar 14, 2020 at
As noted in the prior post, George Mason's central administration is caving to requests from left-wing activists seeking to learn the identities of the donor(s) who gave the gift that resulted in the GMU law school being named in honor of Antonin Scalia. In addition to the fracas being triggered by the usual crowd whose paranoia about the Koch brothers knows no bounds, the WSJ editorial hints that the central university administration is doing the bidding of the leftists who took over Virginia's state government in the last election: There are also political questions. Since 2019 the interim president of... Continue reading
Posted Mar 14, 2020 at
As a Wall Street Journal editorial today explained, there's a big fight going on at the Antonin Scalia Law School at George Mason University, with the usual suspects on the left cancel culture trying to find out the anonymous donors behind the gift that resulted in the law school being named after Scalia: After Scalia died in 2016, a donor, described as a friend of the Justice, offered $20 million to rename GMU’s law school in his honor. GMU, a Virginia-based public university, agreed to condition the gift on the donor’s anonymity. The name officially changed that year. Yet this... Continue reading
Posted Mar 14, 2020 at
Bloomberg: Chief executives of big public companies, like most everyone else in the U.S., are at risk of exposure to the Covid-19 virus—but if a CEO tests positive, experts say that’s probably a “material risk” to shareholders. The big question is: What must executives and directors reveal, and when? The report quotes securities law professor Tom Lin who thinks “it would be prudent for any CEO who’s been diagnosed with Covid to disclose it to their board, at minimum, and probably to their shareholders.” I concur. Setting aside the question of prudence, what must a company disclose--if anything--if its CEO... Continue reading
Posted Mar 11, 2020 at
Lindgren, James T., The Religious Beliefs, Practices, and Experiences of Law Professors (June 1, 2019). 15 University of St. Thomas Law Journal 342 (2019); Northwestern Public Law Research Paper No. 19-27. Available at SSRN: or In the 1990s I surveyed law faculties at the top one hundred law schools, collecting data on professors’ religious affiliations. [Measuring Diversity: Law Faculties in 1997 and 2013, 39 Harv. J.L. & Pub. Pol’y 89 (2016),] I found that Christians were represented at only about half their percentages in the larger population, while Jewish and nonreligious law professors were substantially overrepresented. Yet... Continue reading
Posted Mar 10, 2020 at
Andrew Abraham Schwartz has posted a very interesting new paper, which I think advances the ball significantly in the seeming dormant debate over mandatory disclosure. The gist of his argument is that we need to draw a "distinction between primary markets (where companies offer securities directly to investors) and secondary markets (where investors trade securities with one another)." The two key economic concepts that undergird the modern theory of mandatory disclosure – agency costs and information underproduction – make good sense in the context of secondary markets. But if we shift our gaze to the primary context, these two ideas... Continue reading
Posted Mar 10, 2020 at
Keith Paul Bishop reports: Last August, I reported on the filing of a taxpayer challenge to California's Board Gender Quota Law. Crest v. Padilla, Cal. Super. Ct. Case No. 19STCV27561. ... The Secretary of State's demurrer will be heard on Monday by Superior Court Maureen Duffy-Lewis. Secretary Padilla faults the plaintiffs with failing to plead specific facts alleging illegal expenditures sufficient to establish taxpayer standing under Section 526a of the California Code of Civil Procedure. ... Continue reading
Posted Mar 9, 2020 at
I am delighted to report that Wake Forest Professor Andrew Verstein will be joining our corporate law group here at the UCLA School of Law. I am tremendously pleased by Andrew's decision to accept our offer, as I am a huge fan of both his work and him as a person. Andrew is currently a faculty member at Wake Forest University School of Law, where he joined the the faculty in 2013 and was promoted to full Professor in 2019. His scholarship and teaching are in the areas of business organizations, corporate finance, securities regulation, and contracts. Among his many... Continue reading
Posted Mar 7, 2020 at
Bloomberg reports that: The U.S. Supreme Court seemed inclined to give the president more power over the Consumer Financial Protection Bureau as the justices considered whether Congress went too far in trying to insulate the agency from political pressure. Hearing arguments in Washington Tuesday, the court’s conservatives suggested they agreed with Trump administration contentions that the Constitution requires the president to have broad ability to fire the agency’s director. When Congress set up the agency, it gave the director a five-year term and said the person could be ousted only for specified reasons. Justice Brett Kavanaugh noted that the current... Continue reading
Posted Mar 4, 2020 at