October 6, 2022

Universal Proxy: We’ve Got an Example

Michael Levin recently shared via Twitter an example of universal proxy cards used by participants in what’s apparently the first contested election to be conducted under the new rules. Here are the preliminary proxy materials filed by Apartment Investment and Management Company, and here are the materials filed by the dissident group.  Michael’s tweet includes a link to his TAI newsletter discussing the filings, which provides some interesting insights into the contest & the filings themselves.  Here’s an excerpt:

First, the proxy cards recommend how shareholders vote, in addition to properly distinguishing between the AIM and L&B nominees. The SEC rule was largely silent as to how the proxy card (not the proxy materials) should set forth specific voting instructions. We expect to see more companies and activists to test the boundaries of what the SEC will allow them to put on a proxy card.

Second, both of the AIM and L&B proxy statements include a curious statement. AIM’s appears in the Q&A section (p. 5), with a similar idea in the letter to shareholders:

If I want to vote for one or more of Land & Buildings’ nominees can I use the WHITE universal proxy card?

Yes, if you would like to elect some or all of Land & Buildings’ nominees, we strongly recommend you use the Company’s WHITE proxy card to do so.

L&B states (p. 17):

Any stockholder who wishes to vote for one of the Company’s nominees in addition to the Land & Buildings Nominees may do so on Land & Buildings’ BLUE universal proxy card. There is no need to use the Company’s white proxy card or voting instruction form, regardless of how you wish to vote.

[emphasis theirs in each excerpt]

Why would each acknowledge that shareholders might vote for the other’s nominees, and suggest they could do so using their own proxy card? We’d think they would do everything it could to discourage this. It appears each wants to receive as many proxy cards as it can. They can thus track which shareholders have already voted. If AIM receives proxy cards with votes for L&B nominees, and L&B for AIM nominees, then each can easily contact those shareholders, and attempt to persuade them to change their votes. Clever…

John Jenkins