Akin Gump has issued an alert on administration and congressional activity since President Trump’s inauguration. The report highlights key regulatory and legislative developments across a range of policy areas. This document also previews the policy agenda for the coming year and concludes with a political update and analysis of the 2018 congressional elections.
Strategic planning should continue to be a high priority for directors in 2018. In an increasingly competitive and evolving marketplace, coupled with a domestic economy growing at a low single-digit rate, stagnation is tantamount to failure, and singular reliance on organic growth is effectively a bet on poaching market share from rivals. In almost all industries, a company’s chances for success, survival and growth are dependent on accretive acquisitions. This is especially true in certain sectors, including health care and technology, as rapid consolidation and vertical integration in these industries continues. Boards will continue to struggle with the balance between achieving short-term results and/or otherwise using cash resources to satisfy calls by investors with an appetite for immediate gratification versus deploying capital to invest in longer-term growth opportunities that involve additional risk. Board discussions and decisions about capital deployment, risk tolerance and strategic plans are, and for the foreseeable future will continue to be, complicated by the unexpected continued low-interest-rate environment, which has enabled companies’ access to debt at historically low rates. Boards should expect to face mounting pressure to take advantage of the low-rate debt to finance share repurchases at the same time they consider potential acquisitions that could be financed with cheap debt.
Special Bonus: Tax reform
When President Trump was inaugurated on January 20, Republicans took full control of Congress and the White House for the first time since 2007. Prior to this, the GOP had unified control of the Legislative and Executive Branches for only six and a half of the past sixty-four years. Republicans immediately set about using this historically rare opportunity to push forward long-held policy goals, including comprehensive tax reform.
On November 1, 2017, the Division of Corporation Finance (Division) of the Securities and Exchange Commission (SEC) released Staff Legal Bulletin No. 14I (SLB No. 14I) to offer guidance on the scope and application of Rules 14a-8(i)(7) and 14a-8(i)(5), each of which provide a substantive basis for excluding shareholder proposals from a company’s proxy materials for shareholder meetings. SLB No. 14I also discusses a new policy requiring documentation when shareholders submit “proposals by proxy,” along with the Division’s views on the use of graphs and images in the supporting statements for shareholder proposals.
This week we highlight a speech by Stephanie Avakian, Co-Director of the SEC’s Division of Enforcement, on cybersecurity and retail investor protection. In her remarks, she addresses the key priorities of the Enforcement Division in its allocation of resources, including its focus on retail investors, cyber-related issues, the conduct of investment advisers and broker-dealers, financial fraud and disclosure issues, and insider trading.
Akin Gump real estate partner John Bain has been profiled by Metropolitan Corporate Counsel in the article “To Make Deals in Hospitality Today, You Need to Be Creative: As the challenges mount, lawyers need to adapt,” discussing his practice and the state of the hospitality sector.
To read the full article, please click here.
This week, we share a group of short videos put together by Goldman Sachs that we found very interesting. Their experts shed light some of the new and emerging words and phrases that are important to know in today’s economy. We found it thought provoking as we think more about how technology is shaping the way we work and live.
On June 30, Congress gaveled out for the July 4 recess after postponing a critical vote to begin debate on an Affordable Care Act (ACA) repeal-and-replace bill. Senate Majority Leader Mitch McConnell (R-KY) and the GOP caucus have worked for the last two months in countless hours of behind-the-scenes meetings on what many believe to be a long-shot effort to unite 50 of the 52 Republican senators.