DealLawyers.com Blog

Jasper Street’s latest newsletter highlights notable activist campaigns that went to a vote in May, including those at Phillips 66, WEX, Harley-Davidson, US Steel, and NHI. It shares the following key takeaways from these campaigns:

Governance Still Drives Outcomes: ISS’s support for Elliott at Phillips 66 was heavily governance-focused. Boards must address entrenchment, refreshment, and independent leadership proactively and with an objective lens.

Passive vs. Active Dynamics Matter: The Phillips 66 vote was a clear example—passive investors backed management, while actives backed Elliott. Companies must recognize that governance concerns flagged by ISS and Glass Lewis can resonate with actives, but passive investors often hesitate to back a full dissident slate.

Withhold Campaigns Can Be Equally Dangerous: The WEX and Harley-Davidson outcomes show that withhold campaigns are powerful tools that can force change at companies targeted by activists. Shareholders can voice their frustration en masse, sometimes leading to immediate change or these campaigns build momentum for future contests—even without immediate director turnover, they send a clear message.

It’ll be interesting to see if there is a corresponding increase in proxy contests next year, with “vote-no” campaigns — possibly to, as Andrew Freedman of Olshan said, “test the waters and perhaps consider a contest next year” — on the rise.

– Meredith Ervine