Corporate Law
Martin Lipton’s Latest Client Memo ‘Wrongheaded,’ Columnist Says
Posted Jan 8, 2008, 11:15 am CST
By Debra Cassens Weiss
The latest advice offered by high-profile lawyer Martin Lipton to his corporate clients is “wrongheaded” and “dangerous,” Andrew Ross Sorkin asserts in a Dealbook column for the New York Times.
The 76-year-old lawyer sent out a pre-Christmas memo advising corporate board members to resist shareholder efforts to dictate executive compensation and reduce CEO powers. Lipton, who is a co-founder of Wachtell, Lipton, Rosen & Katz, also advised companies to be judicious in deciding which whistle-blower complaints merit investigation.
Sorkin says the memo shows Lipton’s impulse as “an unapologetic apologist for the days of the Imperial CEO.”
“It is as if Mr. Lipton wants to return to an era when chief executives could do whatever they wanted, when boards were mainly rubber stamps and shareholders had only one way to express their discontent: sell their shares,” Sorkin writes. “But he can’t turn back the clock, which is why Mr. Lipton’s advice isn’t just wrongheaded. It’s dangerous.”
The column says the pendulum has swung in favor of shareholder rights in the post-Enron world. Yet it notes that the pendulum will continue to swing, and—eventually—Lipton’s advice could be back in vogue.