DealLawyers.com Blog

Increasingly, excessive perks are being used by activists in their battles for corporate control. To illustrate, the following short article from Sunday’s NY Times picks up an item from the insurgent’s proxy statement: “The fight for control of the Ceridian Corporation, the payroll processing company, took a pointed turn in late July with the activist investor William A. Ackman taking a jab at the company’s chairman over his use of the company jet.

Mr. Ackman’s Pershing Square Capital Management, which is Ceridian’s largest shareholder, has been trying to persuade shareholders, who are due to vote Sept. 12, to reject a $5.3 billion buyout offer because it allows managers to keep their jobs and a $27 million sweetener to go along with the deal.

Mr. Ackman, who earlier won changes at McDonald’s and Wendy’s, got up close and personal — accusing the chairman, L. White Matthews III, of using the company plane to ferry him to his vacation lodge in Wyoming. In a letter to Ceridian, he said Mr. Matthews flew to his Jackson Hole home “seven times in one 63-day period during the fly-fishing season last summer.”

Not so, said a Ceridian spokesman, Pete Stoddart, who said the corporate plane “was strictly used for business purposes.”

Peer-to-Peer Generated Governance Changes

From CorpGov.net: Almost half (45%) of portfolio managers and buy-side analysts surveyed by Bigdough think it is beneficial for an activist shareholder to have a seat on a target company’s board. Only 5% say activism is not helpful in unlocking shareowner value. However, Bigdough also found no clear sign that mainstream investors are jumping on the coattails of activists by increasing their existing investments in targeted companies.

A huge number of respondents – 86% – believe activism will keep growing and 85% believe shareowners should have a “say on pay.” (Mainstream investors get behind activism, CrossBoarderGroup.com, 7/13/07)