Loyalty Shares

ECGI Roundtable Series

Loyalty Shares

  • 18 June 2018
  • •
  • Brussels, Belgium

*** Click here to access the event report ***

 

Hosted by:

*** This Event was by invitation only. ***

(ECGI Institutional and Patron Members may submit attendance requests by email however spaces are limited)

The Roundtable focused on loyalty shares as a legal solution for encouraging long-term ownership, a concept that is promoted by policy makers, including the European Commission, some institutional investors and issuers. Loyalty shares that confer additional voting rights have a long tradition in France and were recently introduced in Italy. They are also expected to be introduced in an ongoing reform of Belgian company law. Loyalty shares with “tenure voting” or “time-phased voting” are also found in the United States. They have gained prominence recently through the proposal to create a “Long Term Stock Exchange” (LTSE). Loyalty shares might also confer additional cash-flow rights to long-term holders. The ECGI Roundtable will critically examine these developments. What are the practical difficulties associated with the operation of loyalty share structures? Does the default rule matter? Do IPO rules matter? Do loyalty shares really promote long-term ownership or do they serve as a “stealth” entrenchment device for controlling shareholders or boards? Are loyalty shares less transparent than other control-enhancing mechanisms, for example dual-class shares?

 

Background Reading

1. Bolton, P., & Samama, F. (2013). Loyalty‐Shares: Rewarding Long‐term Investors. Journal of Applied Corporate Finance, 25(3), 86-97. (Access here)

2. Cremers, Martijn and Pareek, Ankur and Sautner, Zacharias. Short-Term Investors, Long-Term Investments, and Firm Value (March 14, 2017). (Access here)

3. Becht, Marco and Kamisarenka, Yuliya and Pajuste, Anete. Loyalty Shares with Tenure Voting - a Coasian Bargain? Evidence from the Loi Florange Experiment (April 2018). (Access here)

4. Bebchuk, L. A., & Kastiel, K. (2017). The Untenable Case for Perpetual Dual-Class Stock. Va. L. Rev., 103, 585 (Access here)

5. Bebchuk, Lucian A. and Kastiel, Kobi. The Perils of Small-Minority Controllers (February 1, 2018). Forthcoming, Georgetown Law Journal. (Access here)

6. Croci, Ettore. Controlling-Enhancing Mechanisms: Loyalty Shares and Multiple-Voting Shares in Italy (June 2018). (Access here)

 

Organisers

Marco Becht, Solvay Brussels School, ECGI and CEPR

Luca Enriques at the University of Oxford and ECGI 

 

10:30: Registration

10:45: Welcome & introduction

11:00 - 12:15: Session 1

12:15 - 13:15: Lunch

13:15 – 14:30: Session 2

14:30 - 14:45: Coffee Break

14:45 – 16:00: Session 3

16:00 - 16:15: Coffee Break

16:15 - 17:30: Session 4

17:30 – 17:45: Coffee Break

17:45 – 18:45: Session 5

18:45 - 19:00: Conclusion and Summing Up

19:00 - 19:30: Drinks reception

[Dinner: 19:45 for 20:00]

 

Contact

Programme queries should be directed to Marco Becht (Marco.Becht@ecgi.org)

or Luca Enriques (luca.enriques@law.ox.ac.uk)

Practical queries should be directed to Elaine McPartlan (roundtables@ecgi.org)

Financial Support from:

 

           

Information

Address:
Rue de la Régence 4, 1000 Bruxelles
Contact:
Elaine McPartlan
European Corporate Governance Institute
roundtables@ecgi.org

Loyalty Shares

10:45
- 11:00

Welcome & Introduction

11:00
- 12:15

Loyalty Shares: Rationale

Back to full programme

Is “Short-Termism” Real?

Time:
11:00h
- 11:35h

Zacharias Sautner, Frankfurt School of Finance

Background reading:

Cremers, Martijn and Pareek, Ankur and

Sautner, Zacharias, Short

-

Term Investors, Long

-

Term

Investments, and Firm Value (March 14, 2017). Available at SSRN:

https://ssrn.com/abstract=2720248

Speakers

11:35
- 12:15

Loyalty Shares –An Overview

Speakers:
Back to full programme

Loyalty Shares –An Overview

Time:
11:35h
- 12:15h

Fred Samama, Amundi

Background reading:

Bolton, P., & Samama, F

. (2013). Loyalty-Shares: Rewarding Long-term Investors. Journal of

Applied Corporate Finance, 25(3), 86

-

97.

Speakers

12:15
- 13:15

Lunch

13:15
- 14:30

Loyalty Shares in France

Back to full programme

Loyalty Shares in France –Overview

Time:
13:15h
- 13:55h

Geneviève Helleringer, ESSEC and Oxford

Speakers

13:55
- 14:30

The Loi Florange –A Coasian Bargain?

Speakers:
Back to full programme

The Loi Florange –A Coasian Bargain?

Time:
13:55h
- 14:30h

Anete Pajuste, Stockholm School of Economics Riga

Background reading:

Becht, Marco, Anete Pajust

e and Yuliya Kamisarenka

(2018),

Loyalty

Shares with Tenure

Voting

–

a Coasian Bargain?

Evidence from the Loi Florange Experiment. Mimeo

Speakers

14:30
- 14:45

Coffee Break

14:45
- 16:00

Loyalty Shares in Italy

14:45
- 15:25

Loyalty Shares in Italy –Overview

Speakers:
Back to full programme

Loyalty Shares in Italy –Overview

Time:
14:45h
- 15:25h

Ettore Croci, Università Cattolica del Sacro Cuore

Speakers

Back to full programme

Italian Loyalty Shares in Practice

Time:
15:25h
- 16:00h

Luca Garavoglia, Chairman, Davide Campari-Milano S.p.A.

Speakers

16:00
- 16:15

Coffee break

16:15
- 17:30

Loyalty Shares in Belgium and the Netherlands

Back to full programme

Loyalty Shares and the Belgian Company Law Reform

Time:
16:15h
- 16:50h

Philippe Lambrecht, Secretary General,

FEB

-

VBO

and Université catholique

de Louvain

Speakers

Back to full programme

Loyalty Shares in the Netherlands

Time:
16:50h
- 17:30h

Alessio Pacces, University of Rotterdam

Speakers

17:30
- 17:45

Coffee Break

17:45
- 18:45

Loyalty Shares in the United States

17:45
- 18:45

Are Loyalty Shares a viable alternative to the “The Untenable Case for Perpetual Dual-Class Stock”?

Speakers:
18:45
- 19:00

Conclusion and Summing Up

Speakers

Presentations

Back to all presentations

Is “Short-Termism” Real?

Time:
11:00h
- 11:35h

Zacharias Sautner, Frankfurt School of Finance

Background reading:

Cremers, Martijn and Pareek, Ankur and

Sautner, Zacharias, Short

-

Term Investors, Long

-

Term

Investments, and Firm Value (March 14, 2017). Available at SSRN:

https://ssrn.com/abstract=2720248

Speakers

Back to all presentations

Loyalty Shares –An Overview

Time:
11:35h
- 12:15h

Fred Samama, Amundi

Background reading:

Bolton, P., & Samama, F

. (2013). Loyalty-Shares: Rewarding Long-term Investors. Journal of

Applied Corporate Finance, 25(3), 86

-

97.

Speakers

Back to all presentations

Loyalty Shares in France –Overview

Time:
13:15h
- 13:55h

Geneviève Helleringer, ESSEC and Oxford

Speakers

Back to all presentations

The Loi Florange –A Coasian Bargain?

Time:
13:55h
- 14:30h

Anete Pajuste, Stockholm School of Economics Riga

Background reading:

Becht, Marco, Anete Pajust

e and Yuliya Kamisarenka

(2018),

Loyalty

Shares with Tenure

Voting

–

a Coasian Bargain?

Evidence from the Loi Florange Experiment. Mimeo

Speakers

Back to all presentations

Loyalty Shares in Italy –Overview

Time:
14:45h
- 15:25h

Ettore Croci, Università Cattolica del Sacro Cuore

Speakers

Back to all presentations

Italian Loyalty Shares in Practice

Time:
15:25h
- 16:00h

Luca Garavoglia, Chairman, Davide Campari-Milano S.p.A.

Speakers

Back to all presentations

Loyalty Shares and the Belgian Company Law Reform

Time:
16:15h
- 16:50h

Philippe Lambrecht, Secretary General,

FEB

-

VBO

and Université catholique

de Louvain

Speakers

Back to all presentations

Loyalty Shares in the Netherlands

Time:
16:50h
- 17:30h

Alessio Pacces, University of Rotterdam

Speakers

Are Loyalty Shares a viable alternative to the “The Untenable Case for Perpetual Dual-Class Stock”?

Back to all presentations

Are Loyalty Shares a viable alternative to the “The Untenable Case for Perpetual Dual-Class Stock”?

Time:
17:45h
- 18:45h

Kobi Kastiel, Harvard Law School

Background reading:

Bebchuk, L. A., & Kastiel, K. (2017). The Untenable Case for Perpetual Dual

-

Class Stock. Va. L. Rev.,

Speakers

Authors