April 5, 2017
Activism: Fewer Companies Go the Distance in Proxy Fights
This FTI Consulting report says that 2016 saw a sharp increase in the number of companies that chose to settle proxy contests with activists instead of taking their chances with a shareholder vote. What’s more, many of those settlements seem to have been on the kind of terms only Neville Chamberlain could love. Here’s the intro:
Shareholder activists showed no signs of slowing down in 2016. These investors continue to instill fear in corporate board rooms across America and bring their concerns to the public as illustrated by the growing number of proxy fights; 110 in 2016 alone, a 43% surge over 2012. In that time, companies have more frequently succumbed to these investors and at times, accepted unfavorable settlement terms instead of pushing forward and fighting through a proxy contest.
Companies that did fight it out didn’t have a bad track record – winning 27 out of the 37 battles that went to a vote. But FTI says that looks are deceiving, and what that record may really reveal is that companies only held their ground when victory was a near certainty.
– John Jenkins