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Thinking of Hiring Lazard? Think Again.
Atria Senior Living: Lazard is taking big chances with investors' money
Atria Senior Living is wholly owned by a private equity buyout fund affiliated with Lazard. Many of Lazard's investor-clients in this buyout fund are pension funds for hundreds of thousands of union members in the United States, Canada, and Europe. But as Atria workers struggle to improve their jobs and the quality of care for residents, Lazard and Atria are expending precious client resources on a risky anti-union campaign that poses serious financial and reputational risk to Atria, Lazard, the fund's investors, and potentially all Lazard clients. More »
SEIU Encourages Pension Fund Leaders to "Steer Clear of Lazard"
Representatives from SEIU's Capital Stewardship program distributed materials about Lazard at the Council of Institutional Investors' Spring Meeting, as part of SEIU's ongoing effort to educate pension fund leaders and staff about Lazard's history of corruption, bad advice, and risky asset management practices.
Lazard's Corporate Governance Problems
In April 2006, Lazard opened its Korea Corporate Governance Fund, seeking to buy minority stakes in Korean companies and to use its minority shareholder status to push good corporate governance reforms. However, Lazard's own corporate governance structure disenfranchises shareholders and allows them to avoid paying their fair share of taxes.
- Dual Class Stock Structure: Lazard has a dual-class stock structure, arguably the single most disenfranchising provision a company can adopt from a governance standpoint. Lazard insiders control over 50% of total voting power, severely limiting the voting rights of outside shareholders and make it virtually impossible to remove management or directors for underperformance or conflicts of interest.
- Classified Board: Lazard has a classified (or staggered) board, where only a minority of directors stand for election each year, thus preventing shareholders from voting in a majority of new directors at any single annual shareholder meeting.
- Combined Chairman / CEO: Lazard continues to have a combined Chairman/CEO in Bruce Wasserstein, at a time when many pre-eminent Wall Street and commercial banks are recognizing that separating these two roles is good for business and good for shareholders.
- Tax Avoidance: Lazard has used questionable means to avoid or reduce its corporate income tax liabilities. Some of these tax avoidance measures have recently come under Congressional scrutiny. The firm's offshore incorporation in Bermuda, coupled with its structure as a publicly traded partnership, makes its effective tax rate substantially lower than most, if not all, of its peers in the investment banking and brokerage industry.
Is Lazard doing its best for investors?
"Greenhill's Thrift Pays Off: More Left for Shareholders; As Firm Pinches Pennies; On Employees, Other Costs" (by subscription only)
"Roger Altman and Bruce Wasserstein, the mergers-and-acquisitions maestros running Evercore Partners and Lazard, respectively, should pay more attention to Bob Greenhill. The former Morgan Stanley president was the first to take his eponymous advisory boutique public. That was a fine way for him and his partners to cash out, so it was hardly surprising others followed suit. But neither has been as successful as Greenhill & Co. in minting money for their shareholders.
-The Wall Street Journal, Feb. 13, 2008. More »
You're Fired!
Read more about how, when and why Lazard was fired by some clients »
More NEWS coverage of Lazard and Bruce Wasserstein »