Source: https://www.linkedin.com/feed/update/urn%3Ali%3Ashare%3A7000669529999601664
#Boards of #Directors: Companies Brace for Onslaught of New Activists After Change in Proxy-Voting Rules: New #ballot #format for electing #corporate #directors lowers the #entry #barriers for #activist #shareholders: https://lnkd.in/eGGHK_-x :
IN-DEPTH LATEST on #Universal #Proxy #Card: https://lnkd.in/eFYv42zZ :
This #proxy #season is shaping up to be the busiest on record. Companies are concerned it will draw in first-time #activists who think they can take advantage of the new system to threaten #proxy #contests to create leverage to advance their agendas.”
Sinking #stock #prices and a change in #proxy-#voting #rules are emboldening many first-time #shareholder #activists to seek changes at some of the biggest names in #American #corporations. Companies, always wary of activist advances, are feeling particularly vulnerable as a result of new rules imposed by U.S. #regulators in September requiring the use of a so-called #universal #proxy #card in #corporate-#director #elections, bankers and lawyers say.
In the new format, #directors nominated by a #company must be listed on the same #ballot as those put forth by activists, enabling #investors to pick and choose, rather than #voting entirely with either the company or the activist.
Advisers to companies say the likelihood of at least gaining one board seat will increase significantly for smaller players. That’s especially true given that they will no longer incur the substantial expense—sometimes running into six figures or more—of printing and mailing #proxy #cards to all #shareholders, lowering the barriers to entering the activist game.
Activists seek changes at underperforming companies through deal-making and other means. Increasingly, they are also pressuring companies to up their game on #environmental, #social and #governance, or #ESG, issues.
Late fall and winter are when activists typically make contact with a company, often privately, to initiate a campaign. Proxy-voting season runs from roughly mid-April to June, when most publicly traded businesses host their annual meetings.
Through September this year, about 25% of activist campaigns launched globally at companies with market capitalizations over $500 million have been spearheaded by first timers, up from 17% in all of 2021… Overall, there were 171 campaigns launched as of Sept. 30, up 39% from the same period in 2021, as activists seek out cheaper entry points to place their bets.
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