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13D Monitor Real-time Activist Newsfeed


Pershing Square's Bill Ackman says his big bet on Valeant Pharmaceuticals (VRX) was a "huge mistake" and that he misjudged the skills of Valeant's previous management led by ousted CEO Michael Pearson. "The highly acquisitive nature of Valeant's business required flawless capital allocation and operational execution, and therefore, a larger than normal degree of reliance on management," Ackman wrote in his annual letter to shareholders. "In retrospect, we misjudged the prior management team and this contributed to our loss. We deeply regret this mistake, which has cost all of us a tremendous amount, and which has damaged the record of success of our firm." Pershing Square recorded a 13.5% loss on investments in 2016, with the sharp decline in Valeant's share price sending the hedge fund to the worst two-year showing since its inception. "A management team with a superb long-term investment record is still capable of making significant mistakes," Ackman wrote. "In retrospect, Valeant's underlying businesses were not sufficiently durable to withstand the impact of the reputational damage caused by the stock price decline, negative media attention, and its impact on employee morale."

Buffalo Wild Wings (BWLD), bowing to pressure from Marcato Capital Management, has retained investment banking firm Cypress Group in its bid to re-franchise restaurants. The company announced that Cypress will work on marketing roughly 10% of the company-owned restaurants. Cypress has worked with other restaurants such as Wendy's and TGI Fridays. It appears unlikely that major shareholders will be sufficiently satisfied by the move, however. Marcato Capital previously hired Cypress to try to persuade Buffalo Wild Wings to franchise more of its restaurants.

Crystal Amber, the largest shareholder in Johnston Press with a more than 21% stake, has initiated discussions with the embattled newspaper publisher's lenders about a possible debt-for-equity swap in an effort to avoid greater financial difficulty. The fund has begun talks with major holders of £220 million in bonds that are set to mature in two years. Crystal Amber is believed to have approached GoldenTree, the U.S. hedge fund that is the biggest creditor of the company. Direct communications between shareholders and bondholders could result in a deal to reduce the company's burdensome debts. Crystal Amber believes that although Johnston Press's stock market value has dwindled to less than £21 million, bondholders may be willing to accept equity in exchange for cancelling a significant portion of its debts. Richard Bernstein, Crystal Amber's founder, has pursued talks with bondholders amid discontent with the publisher's management and board, which are pursuing their own restructuring effort using the same advisers who set up its current financial structure. Meanwhile, worry over the financial health of the business is increasing among other big shareholders. Sources said that the institutional fund manager River and Mercantile may sell its 9.5% stake in Johnston Press to Crystal Amber over fear its value could be eroded. Crystal Amber has also called for the replacement of Johnston Press CEO Ashley Highfield alongside an accelerated restructuring effort.

A year after Pandora Media Inc. (P) co-founder Tim Westergren became CEO a second time to revive the online radio company and avert a potential sale, he is taking one last chance to prove the company can survive on its own amid competition from Spotify Ltd. and Apple Inc. (AAPL). Pandora is gearing up to roll out Premium, a new service offering millions of songs on demand for $9.99 per month. In order for the effort to succeed, the Oakland, Calif.-based company must convince some of its 81 million users to upgrade from their free, customized radio stations. As it loses listeners and money, Pandora has attracted the attention of Corvex Management LP, which owns an 8.8% stake in the company. Westergren has publicly opposed a sale of the company, but sources say several board members are open to the idea or at least to giving Corvex seats on the board. BTIG LLC analyst Rich Greenfield said in a note this month that "Pandora has clearly failed as a public company" and must sell itself or risk war with Corvex, its second-largest shareholder. Corvex has regulatory clearance to acquire 15% of Pandora and has been beefing up its stake while putting pressure on the company to improve performance or sell. Pandora has fired staff and hired an adviser to review options, including a sale. Furthermore, it has extended the deadline for shareholders to propose new directors. Sources say the two sides are locked in negotiations over the next steps, and that absent a sale, Pandora may expand the board to include Corvex representatives.

Depomed Inc. (DEPO) has installed a new CEO and put two new directors on the board, bowing to pressure from Starboard Value LP.  The pharmaceutical firm confirmed Tuesday that industry veteran Arthur Higgins has joined it as president, CEO, and director following the resignation of James Schoeneck.  In addition, Depomed named two new directors—including Starboard partner Gavin Molinelli—to the board, replacing two members who have resigned.  Following a board shakeup late last year that gave Starboard three seats, six of the nine Depomed board members are now Starboard picks.  "We are pleased to have reached an agreement to work with Depomed," said Molinelli on Tuesday, praising Higgins as an "excellent choice to lead Depomed."  Starboard began pressuring the company last April, when it disclosed a 9.8% stake and called for a meeting to overhaul the board.  The investor has said Depomed should explore selling itself and has blasted the company's corporate governance and capital allocation.

CtW Investment Group, an adviser to pension funds invested in hospital company Universal Health Services Inc. (UHS), announced that it would oppose the upcoming re-election of UHS director Lawrence Gibbs unless the company promises to overhaul its corporate governance. In a 12-page letter to UHS's board of directors, CtW described the company's governance as "entrenched and unresponsive." In addition, it expressed concern about a growing number of federal criminal and civil investigations into the company. UHS has issued a response statement in which it rejected CtW's claims and wrote: "UHS is vigilant about its obligations to its investors and shareholders, and we look forward to working with all of our investors to address any concerns they may have regarding UHS business practices."

Elliott Advisors on Wednesday unveiled the results of a poll of Akzo Nobel's investors, showing that shareholders owning nearly 25% of the Dutch company want it to engage in discussions with PPG Industries (PPG).  Akzo has spurned a €24.4 billion ($26.4 billion) takeover offer by PPG and refused to talk to the U.S. company about a deal, saying it would prefer to spin off its chemicals division.  To get investors' perspective, Elliott commissioned London-based shareholders' advisory firm Boudicca Proxy to survey 300 institutional investors—roughly half of Akzo's total shareholder base—on whether they thought Akzo should talk with PPG.  Half responded, accounting for about 24.6% of Akzo's outstanding share capital; and practically all wanted Akzo to invite talks, Elliott said.  A spokesman for the paints and chemicals group said the company's decision not to talk with PPG was based on the interests of all the company's "stakeholders," not just shareholders but also employees and customers, as mandated by Dutch law.  Elliott said in its statement that Akzo should hold talks with PPG ahead of its strategy presentation next month so that "an honest and objective consideration of the two alternatives can be made."  Elliott owns a 3.25% stake in Akzo.

Oasis Management Co. is urging Katakura Industries Co., a Japanese firm founded more than a century ago, to exit businesses that fall short of profit targets.  The Hong Kong-based fund, which holds a 3% stake in Katakura, says the diversity of ventures is not sustainable; and at Thursday's shareholder meeting in Tokyo, it presented three proposals aimed at boosting profitability.  The plans would shake up the status quo at Katakura, which has denounced Oasis's recommendations as "extremely short-term" in nature.  Oasis' chief investment officer, Seth Fischer, is suggesting that Katakura set a target for return on equity (ROE), a measure of profitability.  He recommends that the company eliminate units that do not realize ROE of at least 5% and avoid entering businesses that do not have high prospects for returns.  The proposals are "aimed at focusing management on increased disclosure, increasing profits and capital efficiency," Oasis said in a Feb. 21 presentation.  Its previous recommendations for sustainable long-term growth were spurned "without any consideration," triggering a more public confrontation.  "If anything, our proposals are very modest.  We deliberately made them uncontroversial," Fischer said in an interview.  "Katakura needs to focus on businesses that make money and are an efficient use of capital.  The fact is many of its business lines have barely been profitable or have been loss-making for many years despite large investments."  Thursday's shareholder meeting has divided the two major proxy advisory firms: Institutional Shareholder Services Inc. is backing Oasis's proposals, while Glass Lewis & Co. is taking the opposite position.

Greenlight Capital's David Einhorn told CNBC on March 28 that he backs General Motors (GM) Chairman and CEO Mary Barra even though the automaker opposes the hedge fund's proposal to divide the company's stock into two classes.  "Notwithstanding her objection to our idea, we are supportive of Mary Barra," Einhorn said.  He also noted that Greenlight offered to go to credit rating firms to assure GM that its credit rating would not be damaged by the proposed stock split.  Greenlight believes that breaking up GM's stock into two classes would help it improve its financial flexibility and increase the stock's value, unlocking between $13 billion and $38 billion of shareholder value.  Greenlight Capital owned approximately 0.88% of General Motors' shares as of Dec. 31, according to Reuters.

David Einhorn's Greenlight Capital Inc. is pressuring General Motors Co. (GM) to split its common stock into two classes in an effort to boost its stock price. Sources say Greenlight is calling for one class that pays dividends and a second that would entitle its holders to all earnings, including stock buybacks, after the dividend is paid. Greenlight believes the move could attract new investors willing to pay more for potential earnings growth, potentially boosting the auto maker's market capitalization by as much as $38 billion. According to a GM spokeswoman, the proposed share structure is "unprecedented and untested" and creates risks that are "unacceptable" and "aren't in the best interest of our shareholders." However, sources say Einhorn believes GM is not getting credit for either its earnings potential or its dividend payouts; the company posted $12.5 billion in operating profit last year—its second consecutive record—but its shares trade only about 6% above the price investors paid when it returned to the market in 2010 following its government-backed bankruptcy. Furthermore, the stock trades at the lowest valuation in the S&P 500, while its dividend yield is among the top 25 in the index. Einhorn reportedly believes GM's management is doing a good job operating the business and is not pushing the company to change its capital spending plan.

On March 28, Rent-A-Center Inc. (RCII) said it adopted a stockholder rights plan, or a so-called poison pill, a month after Engaged Capital LLC—which owns a 12.9% stake in the company—increased pressure on the furniture retailer to sell itself. Last month, Engaged Capital nominated five candidates for election to the retailer's board of directors. The Plano, Texas-based company said the stockholder rights would become exercisable if a group buys 15% or more of its outstanding shares. Rent-A-Center said it would seek to cut costs and boost revenue, but Engaged Capital disapproved of the company's "risky" turnaround strategy and urged its board to consider other options.

Two major pension funds on Monday called on Humana Inc. (HUM) shareholders to vote in favor of a proxy access proposal at the company's shareholder meeting next month. In a letter, the California Public Employees' Retirement System (CalPERS) and New York City Retirement Systems wrote: "We believe providing access to a company's proxy by giving shareowners the ability to nominate directors to the board is one of the most important rights for owners of a company. Without effective proxy access, the director election process simply offers little more than a ratification of management's slate of nominees." The terms for proxy access proposed by the two pension funds are ownership of at least 3% of Humana's outstanding stock; three years of continuous ownership; and the ability to nominate up to a quarter of the company's board. CalPERS and the New York pension funds together own roughly 846,000 shares of Humana stock.

Tesco CEO Dave Lewis said on Tuesday the company remains "completely committed" to its agreed £3.7 billion ($4.7 billion) takeover of wholesaler Booker, despite opposition from some major investors. On Monday, Tesco's third and fourth biggest shareholders—Schroders and Artisan Partners, which together own a 9% stake—urged the company to withdraw its offer, calling it overpriced and a distraction from the company's turnaround plan. Lewis told reporters on Tuesday that he was very pleased with the shareholder response since announcing the deal on Jan. 27. He said support for the transaction was evident by investors buying Tesco stock over the last two months. Bruno Monteyne, an analyst at Bernstein and a former senior Tesco executive, thinks that shareholders are largely very supportive of Lewis' turnaround plan, and that the opposition from Schroders and Artisan is not enough to derail the deal. Lewis also noted Tesco was still in the early stages of the takeover process, with the deal still to be formally reviewed by competition authorities. If the review is successful, the deal will need to be approved by half of Tesco shareholders at a shareholder meeting.

Red Mountain Capital Partners LLC penned a letter on Monday urging the board of Deckers Outdoor Corp. (DECK) to consider a sale. The investor, which owns roughly 3.3% of the struggling apparel and accessories maker, noted that the company's stock has lagged all major indices over the past several years. "This underperformance has been driven largely by management's consistently poor capital allocation decisions," wrote Red Mountain managing partner Willem Mesdag. Red Mountain added that the value of a sale to a strategic or financial buyer is much higher than the operating plan announced by Deckers' management in early February. The letter comes almost two months after Marcato Capital Management LP disclosed a 6% stake in Deckers and announced plans to discuss strategy and options. Sales of Deckers' popular UGG boots surged to $1.52 billion in fiscal 2016 from $37 million in 2003, but growth has declined.

Schroder Investment Management and Artisan Partners—two of Tesco's top shareholders—expressed opposition on Monday to the supermarket group's £3.7 billion ($4.7 billion) offer for wholesaler Booker. In a letter to Tesco Chairman John Allan, Schroder called on shareholders to protest the deal announced Jan. 27. "All management teams believe that their acquisitions will create value," it wrote, adding that evidence suggests the very opposite. "We believe that the high price being paid for Booker makes the destruction of value even more likely," the letter warned. Schroder and Artisan are Tesco's third- and fourth-biggest investors with stakes of 4.49% and 4.48%, respectively. Daniel O'Keefe, lead portfolio manager of Artisan's Global Value funds, told Reuters that purchasing Booker was a distraction for Tesco's management and too much of a risk. He said Artisan also had notified the company about its concern over the deal. Compass CEO Richard Cousins, meanwhile, stepped down as Tesco's senior independent director on Jan. 3 because he did not support the transaction—a move that Schroder says sheds doubt over the merits of the deal. Both Tesco's and Booker's stock prices jumped when the proposal was announced; but Tesco's shares have since tumbled on concerns the deal faces an extensive competition probe.

Dutch paint giant Akzo Nobel NV said it will reveal specific plans next month for the separation of its specialty chemicals business from the paints business. The move is the company's latest attempt to duck a $24 billion takeover by U.S. rival PPG Industries Inc. (PPG), after rejecting the company's second improved offer last week of €88.72 ($96.4) a share—up from an initial bid of €83 a share. Meanwhile, some of Akzo's top shareholders are pressuring the Amsterdam-based company to engage in talks with Pittsburgh-based PPG. Causeway Capital Management LLC—Akzo's biggest investor—and Elliott Management Corp. have said that while PPG's latest offer was too low, it was enough for Akzo to open up negotiations. Causeway owns a 6.8% stake in Akzo; and Elliott, which has threatened to call a special shareholders meeting to force Akzo's board to talk with PPG, owns 3%. Even if Elliott could oust members of Akzo's management and supervisory board, it would likely struggle to push the Dutch company into takeover talks because the current governance structure makes it difficult for an outsider to appoint new nominees. Nonetheless, analysts largely believe that PPG will return with a higher, third offer.

Leon Capital Group on Friday revealed via federal securities filings that it holds a 9.5% stake in Ruby Tuesday Inc. (RT). The investment fund likely will engage with management. Ruby Tuesday said earlier in March that it is exploring strategic alternatives, including a possible sale. Leon Capital's focus is on real estate; and Ruby Tuesday's primary asset is the approximately 300 restaurant locations the company owns, rather than leases. Its real estate is valued at far more than the company's market capitalization of about $160 million and makes the company attractive despite more than 10 years of lackluster sales in the flailing casual dining market. Ruby Tuesday's stock rose nearly 9% Monday on the news. Leon Capital said in its securities filing that Ruby Tuesday's shares were "undervalued and represented an attractive investment opportunity." It also indicated that it "may seek to participate in strategic transactions that the issuer may evaluate or undertake in connection with its recently announced exploration of strategic alternatives." Meanwhile, Donald Smith & Co. Inc., a "deep value manager," has acquired more than 10% of Ruby Tuesday's shares in recent months.

The Supreme Court will hear a case later this year centering on whether third parties can bring securities fraud lawsuits against publicly traded firms that do not disclose "known trends or uncertainties" in filings to shareholders. Currently, the Securities and Exchange Commission's antifraud rules permit investors to sue public companies for statements or omissions that are "material" and "misleading." Until a ruling last year by the Second U.S. Circuit Court of Appeals in New York, the rules covered only statements—not omissions. The Second Circuit's decision conflicts with rulings in other circuit courts, which have held that companies are not liable to investors for matters they choose not to publicize. The Supreme Court is expected to hand down a decision by June 2018.

Buffalo Wild Wings (BWLD) on Monday announced a slate of nominees to stand for election at the company's 2017 annual meeting of shareholders, including CEO Sally Smith and others that already serve on the board.  Two individuals plan to retire from the board and would be replaced by former McDonald's executive Janice Fields and CTI Foods CEO Sam Rovit—one of Marcato Capital Management's four proposed nominees.  However, Marcato—which owns a 5.6% stake in the company—is not pleased with the move.  "In our view these changes do not go far enough," said Marcato.  "Rather than scrambling to protect the status quo, Buffalo Wild Wings should address our proposed operational improvements and business model modifications, which we believe are the only ways to drive sustainable value for all shareholders."  Marcato has called for fresh management talent, a greater focus on the core brand, and killing new fast-casual pizza and taco concepts.  Beyond Rovit, Marcato had proposed the nomination of three other board members, including former Pizza Hut executive Scott Bergen, former TGI Fridays executive Lee Sanders, and Marcato fund manager Mick McGuire.

Tronc Inc.'s (TRNC) second-biggest shareholder, Dr. Patrick Soon-Shiong, has sent a letter to the board questioning its corporate governance amid an increasingly contentious battle with the company's biggest investor. In a letter seen by The Wall Street Journal, a lawyer for Soon-Shiong said that he is "troubled by the company's corporate governance, or lack thereof," following recent moves to remove him from the board of directors and to spend $56 million to purchase another investor's shares. Soon-Shiong also demanded that the board raise a limit on his ownership stake in Tronc from 25% to 30%, as it did last week for the company's top shareholder and nonexecutive chairman, Michael Ferro. The doctor recently increased his stake to 24%, while Ferro owns a 24.8% stake, according to regulatory filings. Soon-Shiong additionally requested all board communications and records related to the decision to remove him from the slate of directors that will be voted on at the annual meeting next month. The letter also sought all communications related to moving up the date of the annual meeting, the raising of the ownership cap for Ferro, and the decision for Tronc to purchase 3.75 million shares from the third-largest shareholder, Oaktree Capital.

Sources say Ancora Advisors and Engine Capital are pressuring directors of Tangoe Inc. (TNGO) to sell the company due to weakness in the Orange, Conn.-based IT company's business and falling stock price. Ancora, Engine, and a third investor are working as an investor group and own more than 4% of the company.

Sarissa Capital Management LP announced Monday it has filed a presentation with the Securities and Exchange Commission (SEC) regarding its intention to nominate a minority slate to the board of Innoviva Inc. (INVA) at the 2017 annual shareholders meeting next month. The highlights of its presentation include that "Innoviva must learn that shareholder capital must be optimized for the benefit of shareholders instead of management." It says Innoviva's claims that cost cutting has limited upside is irrelevant; and each cent of Innoviva's extensive amount of shareholder capital should be used in a manner that maximizes shareholder value. In addition, Sarissa is worried that Innoviva attempts to defend its expenditures by comparing itself to more complex companies, which it dubs its "closest peers." Sarissa wonders if this means Innoviva is trying to mislead shareholders, or seeking to use shareholder assets to become much more complex. Finally, Sarissa believes that Innoviva suffers from deficient corporate governance, and that the company does not genuinely want constructive dialogue. Management has dominated the entire nomination process, Sarissa claims, and the board is already planning to reject all Sarissa nominees.

Bowleven PLC said on March 27 that as part of its strategic review, it is considering all options, including those recommended by Crown Ocean Capital P1 Ltd. (COC), which owns a 23% stake in the oil explorer. Bowleven said, "As previously stated, the strategic review will consider all options available to the company, including transforming Bowleven into a holding company, as proposed by COC, alongside other matters already being progressed and negotiated by the Board prior to the GM. The strategic review is being undertaken in the interest of maximizing value for shareholders." COC believes the company should cease work on the Bomono gas permit in Cameroon to focus on Etinde, in the shallow waters off the coast of the country, but Bowleven has secured a deal with Victoria Oil & Gas to develop Bomono.

Dominion Diamond Corp. (DDC), a Canadian miner that has attracted at least two suitors, plans to consider a sale or other strategic options.  M&G Investments, Dominion's biggest shareholder, last week urged the company to enter into a formal sales process.  Washington Cos.—a group of privately held mining, industrial, and transportation businesses founded by billionaire Dennis Washington—extended a $1.1 billion unsolicited bid in March, which Dominion rejected on the grounds of unusual and unacceptable terms.  However, it has since expressed willingness to engage in talks with Washington Cos.  Fellow Canadian miner Stornoway Diamond Corp. also has entered into discussions with Dominion, whose U.S. listed shares rose 7.3% to $13.70 in premarket trading on Monday.

Daniel Loeb's Third Point has taken a stake in a much smaller company than it normally pursues: Chicago-based PrivateBancorp (PVTB).  The hedge fund bought 3 million shares of the business bank in the fourth quarter, presumably after the U.S. presidential election, according to a Securities & Exchange Commission filing.  The purchase makes it the fourth-largest shareholder, with a 3.75% interest.  Loeb's presence raises the stakes for Toronto-based CIBC, which expects to acquire PrivateBancorp in a deal currently valued at $4.04 billion.  PrivateBancorp closed March 24 at $4.44 billion, a 10% premium to the bid.  Its share price shot past the offer after the presidential election sent U.S. bank stocks skyrocketing.  CIBC head Victor Dodig so far has balked at sweetening the bid; but he has also kept PrivateBancorp tied to the deal it struck at the end of June, before the bull run on banks.  PrivateBancorp delayed a shareholder vote on the transaction in December because it would have been rejected.  CIBC has until June 29 to secure shareholder approval.  Dodig has insisted that he will not overpay for PrivateBancorp.  Analysts generally anticipate that he will raise the bid to about $62 per share; PrivateBancorp is trading near $55.  The arrival of Loeb potentially complicates matters, however, and likely could force Dodig to up his offer even more.

Stilwell Group and affiliates have built a 5.2% stake in First Advantage Bancorp (FABK), with plans to start "asserting shareholder rights."  The New York investment firm, which manages about $140 million, said it wants to see some changes but did not go into details.  "We hope to work with existing management and the board of directors to maximize shareholder value," managers wrote in a filing.  "We do not believe the value of the Issuer's assets is adequately reflected in the current market price."  The Clarksville, Tenn.-based lender ended 2016 with assets of $528 million—up 8% from 2015—and profit of $2.9 million, down from almost $3.4 million in 2015.  In a recent note to shareholders, CEO Earl Bradley III pledged that several strategic initiatives would ensure a stronger 2017.  He revealed that he had a "very cordial" phone call with a Stilwell official last week, although it failed to yield insight into what the New York firm has planned.  "As long as their ideals and objectives align with the majority of our other shareholders, there shouldn't be any issue at all," Bradley said.  Since 2000, Stilwell has acquired stakes of at least 5% in 60 different companies—many of them community banks—where it has pushed for outright sales, urged share repurchases, or pursued board representation.

Sources say Evolent Health Inc. (EVH), the healthcare technology provider, is considering a merger with Advisory Board, the business consulting firm engaged by Elliott Management.  Evolent Health shares rose approximately 14% on the news Friday and ended trading up 4.8% at $20.85, while Advisory Board shares closed the day flat at $44.70.  Advisory Board has also been fielding other preliminary offers, sources say; healthcare data company Press Ganey Associates Inc. is among those that have expressed interest.  A deal could involve the sale of the full company or only a divestment of its healthcare division, according to the sources.  Advisory Board said last month it would explore selling part or all of the company after Elliott labeled the company's stock "significantly undervalued."  The fund has an 8.3% stake in Advisory Board, which assisted with the launch of Evolent five years ago.  As of the end of December, Advisory Board had a 6.1% economic interest in Evolent and owned 13.7% of its voting stock.

After two years of "considerable" change following a dispute with Elliott Capital Management, Alliance Trust has boosted its dividend by 16.4%. Elliott's demands that the fund improve its performance spurred a structural overhaul. Total shareholder return for 2016 was 26.4%, compared to 10.7% in 2015. "The last two years have seen considerable change for Alliance Trust and we are very appreciative of the strength of support shareholders have shown," said Chairman Robert Smith. Among other things, the company decided to sell its position in Italian bank Intesa Sanpaolo, which it blamed for the underperformance in its financial portfolio. Its full-year results were released a month after buying back shares from Elliott, its largest shareholder, to end an ongoing battle. Alliance repurchased Elliott's 95.5 million shares at a 4.75% discount below NAV for about £620 million. Elliott has made numerous demands of Alliance over the years, including a review of then-CEO Katherine Garrett-Cox's pay in April 2015, resulting in Garrett-Cox's ouster last year after Alliance agreed to appoint two of three independent directors nominated by Elliott.

On March 24, a team of executives from PPG (PPG) left the Netherlands without meeting the executives of Akzo Nobel during a two-day visit intended to win support for their proposed takeover of the Dutch company, which rejected its takeover offer on March 20.  Michael McGarry, CEO of the U.S. paint maker, remained open to meeting with Akzo Nobel representatives "anytime and anywhere," but an Akzo spokesman stressed that no meetings were planned, echoing statements by Akzo CEO Ton Buechner that the takeover proposal was not sufficient to warrant any engagement with its rival. According to Akzo, PPG's offer "not only fails to reflect the current and future value of Akzo Nobel, it also neglects to address the significant uncertainties and risks for shareholders and other stakeholders." However, a poll of 50 Akzo Nobel shareholders by Sanford Bernstein revealed that 80% wanted Akzo's management to enter talks with PPG.

A recent campaign against Yingde Gases Group, China's largest producer of industrial gases, resulted in shareholders deciding earlier this month to oust five directors, ending a four-month battle for control of the board amid a clash over how to improve the company's finances and business. The move is expected to speed up a strategic review that could include an outright sale of the company. "This case with Yingde had the potential of disenfranchising shareholders, but people went and they voted. It only happened because the insiders split and that gave a real voice to minority shareholders here," said Seth Fischer, chief investment officer at Oasis Management, which holds a 4.5% stake in Yingde. "It was a bit of an accidental win." Investors in the region—where there are many family-owned businesses and listed companies with few people holding the vast majority of shares—increasingly are pushing for boards to act in the interests of all shareholders, not just majority owners.

Samsung Electronics Co. Ltd. says adopting a holding company structure would be difficult at this time, rejecting U.S. activist hedge fund Elliott Management's proposal and ruling out for now a long-anticipated succession move. Investors had expected the company to adopt such a structure, with the founding Lee family eager to solidify its control of the Samsung Group flagship prior to a leadership succession. However, CEO Kwon Oh-hyun told an annual shareholder meeting this is unlikely at this stage. "There are negative effects that would arise from transitioning to a holding company so it does not appear it will be easy to do so at present," Kwon remarked, opting not to elaborate on what those negatives are. Last October Elliott urged Samsung Electronics to adopt a holding company structure by splitting into two and paying out a 30 trillion won ($26.75 billion) special dividend.

Tronc Inc. (TRNC) has agreed to purchase all the stock owned by Oaktree Capital—one of its biggest outside investors—at a significant premium.   The board also voted to boost a cap on the amount of stock that can be held by Tronc's nonexecutive chairman and largest shareholder, Michael Ferro, according to a regulatory filing Thursday.  The moves are the latest development in a bitter public feud between Ferro and the company's second-largest holder, Dr. Patrick Soon-Shiong, and they appear designed to limit the latter's influence over the newspaper publisher.  Previously, a 25% ownership cap was part of the investment agreements with both men.  However, Ferro alone is now permitted to own up to 30%.  A spokesman for Soon-Shiong said he was surprised by the move, adding, "Dr. Soon-Shiong's attorneys will be writing the company to request his contract also be amended to allow his stake to also be increased to 30% from 25%."  In a regulatory filing, Tronc said it will buy back 3.75 million shares from Oaktree Capital at $15 a share for total proceeds of about $56 million.  The purchase price is roughly 14% above Thursday's closing price.

The board of Time Inc. (TIME) is in discussions with "multiple parties" as a potential selloff enters its final stages, sources say.  Time reportedly continues to push the idea of selling to a single buyer, although some potential acquirers would prefer the company to split up.  Meanwhile, it pushed back the deadline for nominating members to the board from March 23 to April 21 and rescheduled its shareholder meeting from early June to June 29.  Some observers believe the moves were made to allow Barry Rosenstein of Jana Partners—which owns at least 5% of Time—and other investors to campaign for a new board if a deal does not go through.  One source speculates that the extension was intended to avoid creating tension around the ongoing sale process but says it nonetheless "creates pressure on the board to accept whatever is on the table."

PPG (PPG) CEO Michael McGarry won the backing of Akzo Nobel's biggest shareholder on March 23 after traveling to Amsterdam to urge the Dutch company to open talks on a 22.7 billion euro ($24.5 billion) takeover.  In a letter to Akzo's boards on March 23, its biggest shareholder, Causeway Capital—which holds a 6.8% stake—said that while "the current bid ... is inadequate, we believe the bid is at a level where management should now engage in discussions with PPG." McGarry said he hoped to meet "stakeholders," including local media, shareholders, politicians, employee groups, and Akzo's boards after having an improved offer rejected this week.  Pressure is increasing on Akzo and CEO Ton Buechner to at least give PPG a hearing.  McGarry said he was not considering another improved offer or a hostile bid right now, because he believes Akzo's investors will force the company's boards to change their mind.

Nelson Peltz's Trian Fund Management is increasing pressure on General Electric Co. (GE), which recently promised to meet stringent cost-cutting targets this year and tie executive bonuses to those goals and profits following talks with Trian. Analysts believe this is GE CEO Jeffrey Immelt's last chance to hang on to the job he has held for about 15 years. "This year it's got to happen," said Nick Heymann, an analyst at William Blair & Co. "If you don't make the targets this year, I don't think we'll be having this discussion again in 2018. There will be a new guy running the show." GE's stock rally fizzled last year, and Trian and other investors were left with returns that trailed the S&P 500 Index. GE agreed to cut costs this year by $1 billion to $23.9 billion and another $1 billion in 2018 and linked bonuses to a target of $17.2 billion in operating profits in its industrial units this year. The benchmarks are intended to ensure GE meets or exceeds its goal of $2 a share in profits in 2018. "We will continue to hold management accountable to its commitments," Trian said. "Over the past month, Trian has intensified its dialogue with senior management regarding new initiatives to help ensure that GE can meet its financial commitments."

Rent-A-Center (RCII) announced it will nominate three current directors for re-election at its annual meeting, despite efforts by Engaged Capital to nominate its own slate of directors. In a filing this week with the Securities and Exchange Commission, Rent-A-Center said its board and management team "have held extensive discussions with Engaged," but decided to have current directors Mark Speese, Leonard Roberts, and Jeffery Jackson stand for re-election. Engaged Capital, which owns a roughly 13.7% stake in Rent-A-Center, already has said it will nominate five people for the three board seats that will be up for election at the annual meeting. The investor has been urging the company to hire a financial adviser and attempt to sell itself. The current board has sat idly amid years of waning operating performance, worsening financial results, and a destruction of shareholder value, said Glenn Welling, managing member of Engaged Capital. "As one of the company's largest shareholders, we felt we had no choice but to present shareholders with an alternative slate of directors—directors who can help stabilize the business while also evaluating all strategic options available to the company."

The Israeli pharmaceutical company Teva (TEVA) is planning a major organization that reportedly will cost thousands of jobs. However, Teva now says it will pursue a variety of efficiency measures instead of big layoffs. The Israeli newspaper Calcalist had reported that Teva planned to cut up to 6,000, or 11%, of jobs, but Teva responded that it preferred to end certain activities, consolidate operations, and freeze new hires rather than eliminate thousands of staffers. Recent signs of turmoil at Teva come just weeks after CEO Erez Vigodman left the company. Investor Benny Landa has been pushing for an experienced global player to take over the position. Furthermore, he wants to see the company split in two, with one side taking the generics business and another group spinning off the brand division.

A fight has erupted between Tronc Inc.'s (TRNC) two biggest shareholders, non-executive chairman Michael Ferro and ousted director Dr. Patrick Soon-Shiong.  Last year, Ferro convinced the billionaire biotech investor to acquire 12.9% of the company to help derail a takeover attempt by Gannett Co. (GCI).  Soon-Shiong also became vice chairman of the newspaper publisher.  Since then, both he and Ferro have been steadily building their stakes in the company as they attempt to outdo the other, sources say.  Ferro owns 24.8%; and Soon-Shiong is right on his heels with 24%, including 950,000 shares recently acquired from Oaktree Capital.  Neither man is permitted to hold more than 25%.  The rift between them worsened this month when the board removed Soon-Shiong from the slate of directors standing for reelection at the annual meeting April 18.  Sources say Soon-Shiong might have considered launching a campaign for control of the board.  However, they believe the board deliberately waited to remove him from the ballot until after the deadline for filing a competing board slate had passed.  Soon-Shiong is shocked at the actions of a "puppet board" that has shown little concern for its fiduciary duties, according to the sources.  They say Soon-Shiong believed his objections—including to Tronc's relationship with Ferro's investment company—led to him being increasingly left out from board activities.

Columbia Threadneedle Investments, one of the 20 top shareholders in Akzo Nobel, echoed calls from Elliott Advisors on Wednesday by urging the company to engage fully with U.S. rival PPG Industries (PPG) about its takeover offer.  "We see strong logic in a combination of Akzo Nobel and PPG and the potential benefits this offers all stakeholders," Columbia Threadneedle emphasized.  "Akzo needs to recognize this and engage."  The investor made its position clear following Akzo's rejection of a sweetened €22.4 billion ($24.19 billion) bid from PPG, up from an initial €21 billion.

Following discussions with Trian Fund Management, General Electric Co. (GE) announced on March 22 that it would cut another $1 billion in costs from its industrial operations over two years and more closely tie top executives' bonuses to profits in its core business. Trian has been pressuring the conglomerate to boost profits. Specifically, GE's board changed the bonus plan for CEO Jeff Immelt and his direct reports so it could be sweetened or reduced by as much as 20%, depending on whether the company reaches its two profit and cost targets. Trian—which took a $2.5 billion stake in GE in late 2015—is pleased with the new framework and said GE should continue "simplifying and streamlining" to achieve financial goals. The investor added that "we will continue to hold management accountable to its commitments."

Elliott Management Corp. on Wednesday escalated pressure on Dutch paint and chemicals giant Akzo Nobel NV to engage with U.S. competitor PPG Industries Inc. (PPG). The Amsterdam-based company on Wednesday rebuffed PPG's latest offer, worth €88.72 a share, just weeks after Akzo rebuffed its initial €83-a-share offer. Akzo said both offers undervalue the company and do not merit discussions. Elliott, which owns 3% of Akzo, on Wednesday agreed that the new offer was too low, but threatened to use obscure Dutch corporate rules to call a special shareholder meeting to force Akzo Nobel NV to consider the bid. Akzo's articles include priority shares, which give holders "ultimate discretion" over the makeup of Akzo's management and supervisory boards, according to research firm Olivetree Financial. The priority shares are held by Foundation Akzo Nobel, whose board is made up of members of the company's supervisory board who are not on the audit committee. "There is no real way in which an unwanted suitor can force its way into Akzo, even with the progression of time," Olivetree wrote in a recent report. However, Elliott believes it can successfully challenge the power of Akzo's priority shares if necessary. The hedge fund argues that investors totaling at least a 10% stake in Akzo can request a shareholder vote to oust members of the company's management and supervisory board members, if a majority of shareholders back the move.

Innoviva Inc. (INVA) has filed definitive proxy materials with the U.S. Securities and Exchange Commission related to its Annual Stockholder Meeting scheduled for April 20, during which shareholders of record as of Feb. 24, 2017, will be entitled to vote. In a letter to shareholders, Innoviva's Board of Directors emphasized the company's track record of creating value for shareholders. In addition, it said, "Recently, [Sarissa Capital Domestic Fund LP] acquired a 3% stake in the Company and asked for four seats on our seven-member Board. The fund has since dropped its demand to three seats. The fund has provided no rationale for its demands to change the Board or our strategy, particularly given Innoviva's track record and focus on shareholder value." The board stressed that six of its seven directors are independent and that the board comprises "four current or former CEOs; two former CFOs; six directors with relevant industry experience; five directors with experience executing substantial [merger and acquisition] transactions; one director with professional investment experience; three directors with healthcare investment banking experience; and three leaders that have delivered significant outperformance in executive roles." The board also took issue with Sarissa's cost-cutting strategy, among other things, and urged shareholders to vote against replacing its "highly qualified directors with Sarissa's hand-selected nominees."

The Board of Directors of Royal Bank of Canada (RY) has announced that at its upcoming annual meeting on April 6, shareholders will vote on a proxy access proposal from a shareholder that asks the board to adopt a resolution enabling shareholders holding 3% or more of shares and meeting certain other requirements to nominate a director to the board and include nominees on the bank's proxy voting form. "Already, current Canadian law allows a shareholder or group of shareholders holding 5% of a bank's outstanding shares and meeting certain other requirements to nominate a director in the bank's proxy materials by submitting a shareholder proposal. The Board of Directors has recommended voting against the current proposal for a number of reasons, including that it would not be aligned with the statutory proxy access rules set out in the Bank Act," said the board. "To further support shareholder rights, we are committed to continuing our dialogue on the evolving proxy access framework in Canada with shareholders and other stakeholders, including the [Canadian Coalition for Good Governance], and will consider an enhanced proxy regime that is appropriate for RBC and consistent with our regulatory and legislative framework. We plan to report back to shareholders at the 2018 annual meeting."

In a letter on Wednesday, more than 100 institutional investors urged Acting U.S. Securities and Exchange Commission (SEC) Commissioner Michael Piwowar not to delay the implementation of a rule requiring companies to disclose a ratio comparing their CEO's pay with their workforce median. Piwowar said in February the SEC was seeking comments about whether to delay the rule and whether companies might be facing any "unexpected challenges" with compliance. The requirement went into effect in January, and the data is expected to be disclosed in many companies' 2018 proxy statements unless the rule is delayed. The move by Piwowar represents part of a wider push by President Trump's administration to scale back or repeal Obama-era rules that Republicans say stunt economic growth. The CEO pay ratio rule aims to help investors better estimate the fairness of CEO pay. "The SEC's pay ratio disclosure rule is thoughtful, balanced, and carefully crafted to provide companies considerable flexibility and makes accommodations to them in complying with the rule, while giving shareholders valuable new information," stated the letter, which was signed by unions, pension funds, activist investors, state treasurers, and consumer advocacy groups.

Akzo Nobel rebuffed a sweetened bid from U.S. rival PPG Industries (PPG) on Wednesday but faced shareholder pressure to negotiate with the bidder.  The Dutch paints and coatings maker said PPG's new 22.4 billion euro ($24.1 billion) takeover proposal, worth 88.72 euros per share, was not enough to justify engaging in talks.  A previous March 9 offer of 83 euros per share valued the company at $22 billion.  Several Akzo shareholders have said they see value in a deal and urged management to begin talks.  Elliott Advisors, which owns more than a 3% stake in Akzo, said that while it considered PPG's second bid "inadequate," it is sufficient enough to warrant further discussions.  "It is only through engagement that Akzo Nobel can determine if PPG is prepared to bid at a level that provides adequate consideration to shareholders," Elliott said.  "Secondly, it does not appear that Akzo Nobel has adequately consulted with shareholders before rejecting both bids."  Akzo said it was worried the deal would lead to major job losses and significant divestitures; it additionally cited differences in corporate culture.  Akzo's boards, which unanimously rejected the new offer, also reiterated that they would rather pursue their own strategy of separating the company's chemicals division.  Like many Dutch companies, Akzo has stalwart defenses against hostile takeovers; and there is political opposition to the deal.

Dominion Diamond (DDC)—which has attracted an unsolicited $1.1 billion cash bid from a group of privately held North American mining, industrial, and transportation businesses founded by billionaire Dennis Washington—should launch a formal sales process, the company's largest shareholder insists.  Dominion owes it to shareholders not only to weigh the proposal from The Washington Cos. but also to entertain other potential offers, says Jamie Horvat of M&G Investments, which owns about 11% of the diamond producer.  "The best outcome for the owners right now is to do a proper strategic review, have people sign up who are interested," the fund manager remarks.  "Maybe others will come out of the woodwork."  Dominion says it has weighed Washington's proposal but found the terms unacceptable.  Dominion shares rose 2% to $12.45 on the New York Stock Exchange March 21, which is below the $13.50-a-share that Washington has proposed to pay.  Analysts say "logical" potential suitors for Dominion include global mining giant Rio Tinto and diamond giant De Beers.

Shareholder activists are making a case against the Business Roundtable's request that the Trump administration use its influence with the Securities and Exchange Commission (SEC) to make it more difficult to get governance, political, or environmental issues onto corporate ballots, according to a letter seen by Reuters. Corporate boards have increasingly faced requests by investors to include various shareholder proposals on company ballots involving issues ranging from executive compensation to climate change. Existing SEC rules have "given shareholders an important voice" and should not be altered, the five investor groups wrote in their letter to White House National Economic Council Director Gary Cohn.

Elliott Management has demanded an independent investigation into a "secret voting lock-up" at Arconic that could have interfered with the hedge fund's efforts to remove CEO Klaus Kleinfeld.  In a letter published on Monday, Elliott said Arconic's board owed shareholders an explanation of a commitment from Oak Hill Capital, a private equity firm, to vote in support of directors nominated by the company—including Kleinfeld.  Arconic announced that morning that it had waived the voting commitment, which was agreed last summer to resolve a dispute over Oak Hill's sale of Firth Rixson to Arconic's predecessor in 2014 but was publicly disclosed only last week.  Arconic said the voting commitment was reported once it became clear that Oak Hill, which owns about 2% of Arconic's shares, would be able to vote at its annual meeting on May 16.  Elliott—which owns 13.2% of Arconic—has since that agreement nominated four directors to the board at Arconic, which it accuses of "persistent failure [that] has destroyed considerable shareholder value."  Monday's letter urged the board to provide a full explanation as well as to dismiss anyone who had taken part in negotiating the commitment from Oak Hill or who had participated in "deliberately hiding" the agreement from shareholders.

Gatemore Capital has called an emergency meeting to shake up the board of courier and freight company DX.  The investor is seeking removal of the chairman and a non-executive director after the company's share price tumbled 90% following two profit warnings.  It also wants to install four new directors—whom it says collectively have more than 100 years of experience in the transport, logistics, shipping, and distribution businesses.  Gatemore Capital holds an 11.3% stake in DX.

PPG Industries Inc. (PPG) reportedly is drawing up a new takeover bid for Akzo Nobel NV.  The Dutch company spurned PPG's unsolicited 20.9 billion-euro ($22.4 billion) offer earlier this month, saying it was too risky and significantly undervalued the company.  Shares in Akzo rose as much as 5.3% to a record 79.11 euros at the start of trading on Tuesday.  Elliott Management Corp., one of company's largest investors, is urging it to talk with PPG about sweetening the pot and to carefully evaluate any new offer, sources said last week.  Political opposition to the deal is building in the Netherlands, meanwhile, and the merger of the world's two biggest coatings companies would attract major regulatory scrutiny in the United States and Europe.  The two companies have leading market shares of architectural paint in many European nations, and the combined entity also would control more than half of the global aerospace-coatings market.  In rejecting PPG's original bid, Akzo said it plans to separate its specialty chemicals business, which accounts for one-third of revenue.  In 2012, Akzo sold its U.S. architectural paints business to Pittsburgh-based PPG for about $1 billion.

Parties affiliated with Wilson Asset Management have demanded a general meeting with Hunter Hall Global Value after it rejected Wilson's proposed buyback, claiming the deal was not in shareholders' best interests.  Washington H. Soul Pattinson and Company Ltd. has indicated that it will oppose resolutions put forth by Hunter Hall at the upcoming meeting.  The firm believes that voting in a completely new board appointed by a single investor carries significant risks.

Sir Chris Hohn's hedge fund has beefed up its campaign to halt the 8.5 billion euro (£7.4 billion) takeover of plane-seat maker Zodiac by the aircraft engine maker Safran. The Children's Investment (TCI) Fund has written to the board members of Safran threatening to sue them personally if the deal goes through and is unsuccessful. "If you do decide to proceed with the transaction and it harms Safran, this would constitute clear negligence on your behalf. We would have no choice but to seek to recover the damage suffered by the company from you personally. You would be at fault because the way you have decided to structure the deal makes you solely responsible for the decision," Hohn said in the letter. "You have intentionally decided to exclude Safran shareholders from the approval process so you cannot claim that we, Safran shareholders, are to blame for the transaction. You have refused to let Safran shareholders have a vote on the merger before the takeover. This cynical design of the deal only serves to increase the scrutiny on you and intensifies the pressure on you to make the correct decision."

Elliott Management Corp. reportedly is urging Akzo Nobel NV to engage with suitor PPG Industries Inc. (PPG), whose $22.1 billion takeover offer it spurned last week.  Elliott had wanted the Dutch paint maker to separate its specialty-chemicals business but now is pushing it to consider a sale as well, albeit at a higher price than the $89.17 per share that PPG offered, sources said.  In rejecting that bid, Akzo argued that it "substantially undervalues" the company and carries significant risk for shareholders.  It did, however, say it would consider separating its specialty-chemicals unit.  The U.S. hedge fund, which has owned a position in Akzo since 2016, expressed concern that management declined to engage with PPG and did not consult the hedge fund.  Elliott—which owns less than 3%, the reporting threshold in the Netherlands, in Akzo—has also questioned management about the performance of Akzo stock, which before the bid was little changed over the past decade.  Elliott's presence could increase the likelihood of a sale, given its reputation for shaking up boardrooms and triggering major changes at companies.  Akzo shares rose more than 15% in Amsterdam on Friday, signaling that shareholders are already hopeful for a deal.

Blackhawk Network Holdings Inc. (HAWK) announced March 20 that it will pick up two new independent directors as part of an agreement with Jana Partners LLC.  The investor, which holds a 4.7% interest, has pressed the gift card provider to dump money-losing units and seek strategic alternatives.  In addition to claiming the additional board seats, Robert Henske and Jeffrey Fox will make up two of the four members of a new cost savings committee that Blackhawk is assembling.  The company also announced that Jerry Ulrich will step down as chief financial officer.

The Children's Investment Fund (TCI) has escalated its attempt to halt French engine maker Safran's €8.5 billion takeover bid for Zodiac Aerospace.  In a letter to Safran's board on Friday, TCI threatened legal action against every director if shareholders' interests are damaged by the deal.  The investor launched a campaign last month to block the transaction, which would form the world's third-largest aerospace supplier by revenue.  TCI owned 4.1% of Safran as of February.  Zodiac last week surprised Safran management and shareholders by reporting a profit warning, just two months after Safran management said Zodiac had moved past its previous production difficulties.  The profit warning sparked a new call from TCI for Safran to cancel its bid for the company.  "In light of Zodiac's catastrophic business update Safran should immediately cancel its proposed takeover of Zodiac," said Sir Christopher Hohn, the hedge fund's CEO, in a letter to Safran management last week.

McDonald's Corp. (MCD) shareholders plan to vote on whether to give the franchisees who operate most of the fast-food chain's restaurants the choice to elect a board member. A shareholder proposal, believed to be the first of its kind, would create a new class of stock that would permit franchisees to elect one director. Nearly 85% of the chain's eateries are franchisee-operated. "We think franchisees should be in the room when the company's most important decisions about operating and strategy are being made," states Maureen O'Brien, director of corporate governance at Segal Marco Advisors, which oversees a trust owning more than 5,000 McDonald's shares. The Securities and Exchange Commission rejected McDonald's request to omit the proposal from the ballot at its next shareholder meeting, likely in May.

Rapier Gold Inc. has released a second letter to shareholders detailing support from Institutional Shareholder Services (ISS) and revealing the facts about Delbrook Capital Advisors Inc.'s hidden agenda and the roles of its co-conspirators in trying to force the company into a sale to a shell company controlled by one of Delbrook's co-conspirators. ISS has endorsed the current board on the basis that Delbrook has not made a compelling case for change; the current board has led the company to outperform its peers amidst challenging market conditions; and the current board is strongly aligned, with shareholders holding about 8.3% of shares while Delbrook's nominees hold only about 0.7% of shares. Rapier's counsel has taken action against Delbrook's continued attempts to conceal the central role its nominees played in structuring, coordinating, and promoting the sale of Rapier to a public shell company with no assets and significant liabilities. The company contends that Delbrook has been publicly misrepresenting that neither Delbrook nor any of its nominees has any material interest, direct or indirect, in any proposed transaction that has materially affected or will materially affect the company. Furthermore, the company's counsel has put Delbrook's counsel on notice that if Delbrook does not correct the material misstatements and omissions in the Dissident Information Circular, objections may be raised to the acceptance of any proxies solicited on the basis of those material misrepresentations and omissions. This may result in proxies solicited by Delbrook not being accepted at the Annual General Meeting.

Chipotle Mexican Grill Inc. (CMG) said March 17 that four of its 12 directors will not stand for re-election at the May shareholder meeting.  Engaged by Bill Ackman, the burrito maker in December appointed four new members to the board—including one from Pershing Square Capital Management, Ackman's hedge fund.  John Charlesworth, Patrick Flynn, Darlene Friedman, and Stephen Gillett are the four directors who will step down.  Friedman has been on the board for 22 years; Charlesworth and Flynn have been directors for almost 20 years each; and Gillett has served for approximately two years.

Three days after Pershing Square Capital Management dumped its stake in Valeant Pharmaceuticals International Inc. (VRX) on March 13, ValueAct Capital upped its stake in the drug company.  Pershing Square, previously Valeant's largest investor, exited its investment after sustaining a more than $3 billion loss following an 18-month campaign to turn the company around.  Valeant's stock sank 95% from its July 2015 peak after a series of news events and litigation surrounding questions about its business practices.  Although ValueAct's purchase of an estimated $30 million worth of shares is only a small fraction of the billions of dollars it once held in the company, "ValueAct is signaling to the market that they think it is a positive factor that Pershing Square is no longer a shareholder," said 13DMonitor.  "There is no change in intent or purpose."  ValueAct increased its stake in Valeant to 5.2% from 4.4% last quarter.

Bravo Brio Restaurant Group Inc. (BBRG) is facing increased pressure from its largest shareholder.  In a letter, TAC Capital LLC Chairman Donald Adam expressed deep disappointment with the company's fourth-quarter results.  Revenues were down 3.2%; restaurant margins declined to 12.7% from 18.2% in 2012; and same-store sales slid 5.5%, extending a decline that began in 2013.  “We believe that the company's latest results demonstrate that the current board of directors and management team have not made the proper strategic and operational decisions to unlock value for all shareholders,” Adam wrote, adding that same-store sales have declined 2% so far this quarter.  TAC owns 15% of Bravo Brio stock.  College Station, Texas-based TAC revealed a sizable, passive investment in Bravo Brio last July.  In a release from early February, Bravo Brio said it offered TAC two seats on the company's board but was spurned.  Also in February, Bravo Brio announced that it was working with investment bankers to explore strategic alternatives, likely meaning the company is for sale.

In a purge earlier this week that cost five Bowleven directors their seats, Chairman Billy Allan was spared.  However, Crown Ocean Capital (COC) says he should lose his spot on the board as well because he is "unwilling to implement the clear new mandate for the new board proposed."  COC wants independent directors Julien Balkany and Didier Lechartier to be seated.  Both have "extensive oil and gas expertise," according to investor.

21st Century Fox (FOX), the media conglomerate under the control of Rupert Murdoch, is considering options to help derail Sinclair Broadcast Group's (SBGI) potential takeover of Tribune Media (TRCO).  Several different parties are interested in acquiring Tribune directly or as part of a consortium, according to people familiar with the situation.  One contender that has talked with Fox is Starboard Value, which held a 4.4% interest in Tribune as of March 15.  While Sinclair recently approached Tribune about a possible merger, other sources say the companies are not close to a deal.  Nexstar Media Group (NXST) is also contemplating a bid for Tribune.  Some of the parties eyeing Tribune are interested in teaming up with Fox, but it reportedly does not want to acquire the broadcaster and ultimately may decide not to interfere at all.  A combination of Tribune and Sinclair, two of the nation's biggest TV station owners, would give Sinclair control of 28% of the Fox-affiliated channels that Murdoch's company does not own directly.

Billionaire mining tycoon Anil Agarwal announced on March 15 that he plans to buy a stake of as much as 2 billion pounds ($2.4 billion) in Anglo American Plc, amounting to 13% of the British mining giant. This would make him the company's second-largest shareholder, and while his ultimate motivations are unknown, there is speculation that he likely will take an active role in the company. Analysts say Agarwal could push for a breakup of Anglo, and it is possible that he would win backing from the company's top shareholder, South Africa's Public Investment Corp. According to Citigroup mining analyst Heath Jansen, Agarwal's company "is positioning itself to be in a front-line seat if any break up of Anglo American were to happen. It also potentially introduces a second activist investor, which could ultimately lead to a break up of South African and non-South African assets." Agarwal has said the purchase was a family investment and that he will not make a takeover bid. The purchase will be funded via a mandatory exchangeable bond issued by his holding company, Volcan Investments Ltd., and secured by Anglo's shares. Jefferies analyst Chris LaFemina says, "It is possible that Mr. Agarwal has been eyeing a deal with Anglo for years, and the planned Volcan investment in Anglo may be part—but not all—of that plan. It is not clear to us what the end game is for Mr. Agarwal, but the wheels are clearly in motion."

Brosh Capital LP announced it has sent an open letter to Alcobra Ltd. (ADHD) Chairman Howard B. Rosen, as well as a request to the company to hold an extraordinary general meeting of shareholders in order to oust the entire board. Brosh, which owns about a 9.4% stake in Alcobra, claims that the current board only represents the interests of management rather than shareholders. The investor says that after meeting with management, it has become even more alarmed that the company would further destroy value for shareholders if left to its own devices. Brosh has concluded that the current management team and board are "unable to derive value from the company's assets" and therefore it requests a shareholder meeting to remove the existing board and nominate six highly qualified director nominees.

Rapier Gold Inc. announced that proxy advisory group Institutional Shareholder Services (ISS) has recommended shareholders rebuff Delbrook Capital Advisors Inc.'s bid to take over Rapier's board of directors, and vote instead for Rapier's director nominees. In its recommendation, ISS said that Delbrook has not made a sufficient case for why the incumbent board must be replaced, especially given the stock's positive recent performance. ISS also said Delbrook has not disclosed a detailed business plan with elaboration of any new strategic initiatives. In addition, only one of Delbrook's nominees owns shares of the company—comprising about 0.7% of the company's outstanding shares—versus the 8.3% of the company's outstanding shares that the incumbent board members currently hold. Shareholders have until March 28 to vote.

RTI Surgical Inc. (RTIX) declared it has reached a settlement agreement with an investor group headed by Krensavage Partners LP. Per the agreement, RTI has increased the size of its board from nine directors to 10, and has appointed a Krensavage nominee to the board. The investor group owns about 7% of the company's outstanding shares.

Starboard Value LP has divested its stake in Macy's Inc. (M), sources said on Wednesday.  The hedge fund, which owned nearly 1% as of the end of December, had been pressuring the U.S. department store operator to separate its real estate from its retail business.  However, Macy's balked at extracting cash from its properties, because it considers the rent from sale leasebacks another form of debt.  Macy's has made some small efforts to monetize its real estate: it agreed to a joint venture with property investment firm Brookfield Asset Management Inc. for about 50 Macy's locations, and it is closing several underperforming stores.  Starboard's move gives Macy's incoming CEO Jeff Gennette more room to deliver on the company's turnaround plan.  It also comes after an acquisition approach by Canada's Hudson's Bay Co. failed to produce a concrete offer for Macy's.  Starboard owned about 3 million Macy's shares worth roughly $107.8 million as of the end of last year, according to the fund's most recent public disclosure of its position.  Macy's shares have declined almost 60% since Starboard revealed a position in the company in July 2015.  Starboard's exit highlights the difficulties facing the retail sector, as a flood of new stores combined with consumers increasingly shopping online has hurt many companies' bottom line.

An investor group in the ASX-listed managed account platform provider Praemium wants to reinstate former CEO Michael Ohanessian, who was removed by the company's chairman last month.  On Thursday, Praemium disclosed that a group of investors—including Paradice Investment Management, Australian Ethical, and Abercrombie Group—backed a move by Ohanessian to call an extraordinary general meeting (EGM) and remove four directors, including Praemium Chairman Gregg Camm.  In addition, the investor group wants Ohanessian to return to his former role as CEO.  "Michael is one of the reasons that the company is doing so well.  If something isn't broken, then don't fix it," Australian Ethical portfolio manager Andy Gracey said.  The bloc owns about 17% of Praemium, and Ohanessian owns almost 4%.  In February, the Praemium board revealed that it had fired Ohanessian as CEO and managing director, a move the shareholder group claims was without grounds.  The shareholder bloc appears solidly behind Ohanessian, who is widely attributed for the company's success.  On Thursday, Paradice portfolio manager Rishi Khilnani agreed that Ohanessian was an appropriate and "high-performing" CEO, and said the group is hopeful the company will thrive under the leadership of a refreshed board and management.  Praemium's directors have about two weeks to respond to the notice and two months to hold the EGM.

magicJack VocalTec Ltd. (CALL) announced Wednesday that it has filed a definitive proxy statement with the Securities and Exchange Commission, which it will mail to shareholders, in connection with the company's 2016 annual shareholders meeting.  magicJack's board of directors additionally delivered a letter to shareholders urging them to vote for the company's slate of director nominees.  The company stated it is "conducting an active strategic alternatives process with multiple bidders" and is in negotiations with groups interested in acquiring the company, including Carnegie Technologies Holdings, LLC.  However, magicJack strongly urged shareholders to ignore the dissident slate of director nominees submitted by Carnegie.  It states that Carnegie launched its last-minute proxy fight to install its own directors in order to make it easier for Carnegie to sell the company to itself at a discount.  "If elected, Carnegie's director nominees would have majority power to approve Carnegie's offer to purchase magicJack for $8.50 a share—even though we have received a number of higher offers that the Board is actively pursuing," the company said.  Meanwhile, Kanen Wealth Management LLC has withdrawn its proxy contest and agreed to vote its shares in favor of the board's nominees, the company said.  magicJack's annual shareholders meeting is slated for April 19.

Lobby group PPLocal, acting in the name of Solocal shareholders, announced it will seek to oppose Safran's planned $9 billion acquisition of Zodiac.  The deal has come under scrutiny after Zodiac issued a fresh profit warning this week.  Hedge fund TCI has also repeated its demand for the deal to be terminated.

Bowleven's board has been ousted following a battle with Crown Ocean Capital, a Monaco-based investment fund. Crown Ocean succeeded in overthrowing the African oil explorer's CEO, Kevin Hart, and five other board members after shareholders backed calls to turn Bowleven into a holding company. The fund has accused the board of being overpaid while mismanaging its African oil assets. In addition to Chairman Billy Allan, the only board member to remain is COO David Clarkson. Crown Ocean's chosen replacements for the scaled-down board are Christopher Ashworth and Eli Chahin, who will immediately step in as non-executive directors. The removal of the CEO was backed by 53.32% of shareholders, or 23% when excluding the votes of Crown Ocean, which has grown its stake in Bowleven to more than a fifth of all shares in recent weeks.

Four shareholder proposals will be voted on at Bank of America Corp.'s (BAC) annual general meeting on April 26, according to the bank's proxy filing on Wednesday. Bank of America Chairman and CEO Brian Moynihan will face another shareholder vote on whether he should hold onto both roles. A shareholder proposal asks the bank's board to install an independent chairman, though permitting the board's discretion to only apply the policy to the next CEO. The other proposals include whether the bank should make stricter clawback provisions for executive compensation, explore divesting some of its assets, and prepare a report examining gender pay. In the proxy, Bank of America's board recommended investors vote against each of the shareholder proposals, as they have in the past. A proposal in 2015 to separate the chairman and CEO roles was unsuccessful, as were previous proposals to toughen clawback rules.

Kingsland Holdings Ltd.—a minority shareholder in Columbian airline Avianca—filed a preliminary injunction Wednesday in an attempt to stop a deal between Avianca and its controlling shareholder Synergy Group Corp. and United Continental Holdings Inc. (UAL). The move is connected to a lawsuit Kingsland filed against Synergy in New York Supreme Court in late February.

In a letter on Wednesday to Safran Chairman Ross McInnes, hedge fund TCI called for the executive's removal unless he terminates Safran's planned takeover of embattled peer Zodiac Aerospace. "If you do not cancel the deal it will be clear evidence that you are not competent to continue as chairman of Safran, so we will call on Safran shareholders to remove you from the board at the AGM in June," TCI said. Shares in Zodiac plummeted 14.4% after it issued a new profit warning late on Tuesday. However, Safran continued to stand by Zodiac, expressing optimism that it can reverse the group's fortunes.

Sources say Paul Singer is reopening his $32.8 billion hedge fund to new cash to take advantage of future investment opportunities. Investors will be able to start pledging capital to the multistrategy hedge fund in the second quarter, according to one source, and it may be used within two to three years. Singer's Elliott Management raises money by locking in commitments from investors and using that capital for future investment opportunities, an unconventionial tactic for the industry. The last time Elliott reopened to additional cash in this way was in 2015, when it reportedly raised $3.8 billion. It gained 13.1% last year in its flagship fund, surpassing the 5.3% gain of the average multistrategy fund, according to Hedge Fund Research Inc. The firm has one of the most impressive long-term track records in the industry, producing an average annual gain of roughly 13.5% since it launched, a source said. Funds including Elliott are seeking additional capital after the industry last year experienced its first net outflow since 2009. Investor sentiment has been favorable toward multistrategy funds, which saw $3.8 billion in inflows in January, the most among the strategies tracked by eVestment. Clients withdrew more than $5.2 billion from the industry as a whole.

Ameri Holdings Inc. (AMRH), a New Jersey-based provider of consulting and technology solutions, sent a letter of interest Monday to Ciber Inc. (CBR) to acquire it for a combination of preferred securities and cash consideration. Ameri is allied with Lone Star Value Management LLC to nominate two candidates to Ciber's board at the upcoming annual shareholder meeting. The partners have formed a stockholder collective called the "AMERI Group," which owns about 5.5% of Ciber's total shares outstanding. Ameri said it first reached out to the IT solutions and staffing provider a few weeks ago to explore the benefits of a merger. At that time, it also submitted a formal proposal to Ciber's board, expressing interest in a strategic business combination. Ciber said it is consulting with independent financial and legal advisors, and its board also is reviewing the offer. The company is trading at perilously low levels and could see its stock yanked from the New York Stock Exchange failing to meet minimum share-price requirements.

The Massachusetts Supreme Judicial Court (SJC) this month ruled that directors of publicly traded companies incorporated in Massachusetts "owe fiduciary duties not to the shareholders—as in Delaware—but to the corporation itself." Massachusetts directors should feel some measure of relief in the wake of the decision, because it provides them with a meaningful check on breach of fiduciary duty litigation brought in the context of mergers. Now, shareholders looking to challenge board member decisions on fiduciary duty grounds must first satisfy the Massachusetts demand prerequisite to a derivative claim before filing suit.

Paris-based CIAM has criticized plans by The Walt Disney Co. (DIS) to seize full control of debt-riddled Paris theme park operator Euro Disney, according to a letter seen by Reuters. The hedge fund, which owns 1.4% of Euro Disney's stock, wrote to the French company's board of directors to object to what it believes are plans by the entertainment giant to force out minority shareholders, claiming it has the support of more than 5% of Euro Disney shareholders, including its holding. Euro Disney is defending the terms of the takeover. An official statement read: "The Walt Disney Company has developed a long-term solution that takes into account all stakeholders. We believe such an operation will provide Euro Disney with a strong financial footing to continue its strategy, while providing minority shareholders the opportunity to exit at a significant premium."

Gatemore Capital is pressuring French Connection Group Plc to split itself or spin off its Toast brand following the British fashion retailer's fifth consecutive annual loss. The investor urged the company in January to split the role of chairman and CEO and called for an outright sale—an option the firm would still prefer, according to Gatemore managing partner Liad Meidar. Gatemore holds an 8% stake in French Connection. In February, Mike Ashley's Sports Direct International Plc took an 11.2% stake in the company, becoming its second-largest shareholder, though its intentions for the company are not clear.

Air Methods Corp. (AIRM) has agreed to be acquired by private equity firm American Securities LLC in a $2.5 billion deal. The U.S. medical helicopter company had been under pressure from Voce Capital Management LLC to sell itself. American Securities' offer of $43 per share represents a premium of about 4% to the stock's close on March 13. The deal is slated to close by the end of the second quarter. Last month, Voce Capital nominated four candidates for election to Air Methods' board.

The Advisory Board Co. (ABCO) and Elliott Management Corp. have agreed to a standstill period during which the hedge fund will not attempt to take over board seats during the company's annual investor meeting this year. The agreement lasts for six months—though the company could request an extension of up to 60 days—or until a major business change or transaction takes place, and it also is halted if the company notifies Elliott or the public that it has ended its own ongoing evaluation of its future strategic options, including a sale of parts or all of its business. The agreement came months after Elliott acquired an 8.3% stake in Advisory Board, with the hedge fund disclosing in a regulatory filing that it would look to engage the company in "opportunities to maximize shareholder value."

Green Dot Corp. (GDOT) and Harvest Capital Strategies LLC announced Monday that the company has invited Jeffrey B. Osher to serve as an observer and advisor to the board of directors. Osher is a managing director and portfolio manager of Harvest, one of Green Dot's biggest long-term shareholders. "With [CEO Steven W. Streit's] leadership and operational, strategic, and entrepreneurial accomplishments, combined with Jeff's experience as a long-term investor in and knowledge of our company, I am confident that we will be well positioned to further expand Green Dot's terrific equity performance over the past year and generate very positive future results," said William I. Jacobs, Green Dot's independent chairman. Jeffrey B. Osher applauded Streit's "successful leadership and strategic vision" and the company's strong financial performance, which has led to significant shareholder value creation over the past year. "I am delighted to have the opportunity to work with Steve, Bill, and the entire Board, and I am eager to help play a part as Green Dot continues to deliver on its mission of building a great business that creates meaningful shareholder value," Osher said.

William Ackman divested from Valeant Pharmaceuticals International Inc. (VRX) on Monday with a loss of more than $3 billion, as he sold his shares in the struggling company after trying to rescue it for 18 months. The investor's move was abrupt and took many by surprise. For Ackman, it certainly marked a dramatic "climb-down" from his earlier vocal support of Valeant. The move, though, should soothe his own investors who had started to express concern about mounting losses in his portfolio. "We elected to sell our investment and realize a large tax loss which will enable us to dedicate more time to our other portfolio companies and new investment opportunities," Ackman stated. Valeant shares declined nearly 10% on the news in after-hours trading. They are down 95% since mid-2015.

Banc Of California Inc. (BANC) will increase membership on its board and launch a search for two new independent directors under a cooperation agreement with Legion Partners Asset Management. The investor, which owns 6.6% of the bank, subsequently agreed to withdraw its notice of nomination and a business proposal submitted to company last month. Legion Partners also pledges to vote its shares in support of any director nominated and recommended by the board and to comply with certain customary standstill provisions, including that it will not acquire more than 10% of Banc Of California's outstanding common stock. The terms expire the day after the company's 2017 annual meeting. Separately, Calstrs—which was not involved in the agreement with Legion—has withdrawn its 14A-8 proposal to change the percentage of shares needed for shareholders to amend company's bylaws. Legion's proposed nominees, Marjorie Bowen and Roger H. Ballou, will be considered along with other candidates for the two additional board seats.

Throwing a wrench in Marcato Capital Management's plans for Buffalo Wild Wings Inc. (BWLD), a large group of franchisees on Monday expressed support for the company and CEO Sally Smith. The bloc, called Franchise Business Services, said it appreciated the ideas offered by Marcato's Mick McGuire but that it felt the restaurant chain's executives were "listening and responding appropriately." Since the group represents roughly 90% of the company's franchisees, the statement is a blow for McGuire, who is preparing for a showdown in the board of directors election at the company's annual meeting this spring. McGuire last month nominated himself and three others to the board. Marcato acquired a 5.2% stake in the company last summer, with a demand for "new talent" and greater reliance on franchising. McGuire has recommended that Buffalo Wild Wings reduce its ownership from about 50% of locations to just 10%, with the rest owned and operated by franchisees. In its statement Monday, the franchisee group warned that McGuire's vision overreaches. It also said it will back current directors and executives at the annual meeting. Marcato issued a statement Monday reiterating its criticism of the company. "Buffalo Wild Wings' incumbent board and management have failed to address the numerous shortcomings at the company for years," the statement read, adding that a refreshed board will lead to long-term value creation for shareholders.

CIAM has notified the Euro Disney board that it opposes plans by Walt Disney Co. (DIS) to assume control of the company. "The Walt Disney Company seeks to force out the remaining minority shareholders by offering them a new public offer, under penalty of having to undergo a strong dilution later," stated a letter dated March 6. Walt Disney Co. had said on Feb. 10 that it would provide investors 2 euros per share for Euro Disney's remaining stock, after it raised its ownership to 85.7%.

Citrix Systems Inc. (CTXS)—which has faced pressure in the past from Elliott Management—has been exploring strategic alternatives including a potential sale, sources said on Monday. The U.S. networking software firm has previously considered putting itself on the block, before pursuing spin-offs and sales of smaller business units instead. It now boasts a market capitalization of $13.2 billion. The sources said a handful of private equity firms recently considered an acquisition of Citrix but determined that a leveraged buyout would be neither easily achieved nor lucrative. However, one buyout firm that reportedly is still interested is Thoma Bravo LLC. Citrix reportedly is working with Goldman Sachs Group Inc. to help navigate it through the process, the sources said. Elliott Management has previously urged Citrix to explore options for NetScaler, a part of its business that helps make Web-based applications faster. Citrix handed Elliott Management a board seat in 2015.

Billionaire investor Carl Icahn indicated in a recent filing that he has purchased another 373,342 shares in Herbalife (HLF), bringing his total stake to 22,872,342 shares, or 24.57% of shares outstanding, valued at nearly $1.2 billion. The move marks another blow against Pershing Square Capital CEO Bill Ackman's short position. In December 2012, Ackman disclosed that he was shorting $1 billion worth of Herbalife and that the stock would drop to $0, indicating a belief that the company was operating as a "pyramid scheme" that targets poor people and that the Federal Trade Commission (FTC) would shut it down. However, Icahn and other fund managers have gone long on the stock. After Herbalife agreed last July to pay a $200 million settlement with the FTC and "fundamentally restructure" its business, Icahn said the board had decided to increase his ownership limit from 25% to 34.99%.

Miner Anglo American announced Monday it is set to cap executive bonuses, following shareholder resistance last year over high payouts even when the company's share price had spiraled. In its annual report, Anglo American said it would lower maximum annual bonuses for CEO Mark Cutifani to 300% from 350% of basic salary, leveling it with other executive directors. For Cutifani, the max is 13.1 million pounds ($16 million). The company also said the value of long-term incentive plans (LTIP) would be limited at twice the face value of the award at the time of vesting—a response to shareholder worry that executives could benefit from share price swings that were not reinforced by improved company strategy. The Pensions and Lifetime Savings Association (PLSA), representing pension funds with a total of one trillion pounds in assets under management, argued the proposed change did not go far enough. "While Anglo-American's direction of travel is to be welcomed, an annual bonus potentially worth 300% of a salary, on top of fixed pay approaching 2 million pounds, still seems far too generous," said Luke Hildyard, a policy lead at the PLSA. In addition, Anglo American said it was raising executive directors' salaries by 2% in 2017 after freezing them in 2016. The new policy will be voted on at Anglo American's annual general meeting (AGM) next month. At last year's AGM, opposition to the remuneration policy was near 50% as shareholders protested windfalls for directors connected to volatile commodity markets rather than savvy strategy.

Sarissa Capital Management LP announced Monday it plans to nominate just three candidates for election to the board of Innoviva Inc. (INVA).  The drug company said last week that Sarissa Capital had nominated four directors to shake up a majority of its board.  The hedge fund, run by former Carl Icahn healthcare lieutenant Alex Denner, owns a 2.72% stake in Innoviva, according to Reuters data.

BlackRock Inc. (BLK) revealed efforts Monday to place new pressure on companies to explain themselves on issues like boardroom diversity and the impact of climate change on their business.  The move could step up efforts like climate-risk disclosure practices created by the Financial Stability Board.  BlackRock, the world's largest asset manager, specified its top "engagement priorities" for meetings this year with corporate leaders in documents posted on its website on Monday. Its action represents a rise in its advocacy with boards and executives and comes after the fund giant was condemned by environmental and labor activists for not supporting proxy resolutions regarding climate change and other topics more often at shareholder meetings.  BlackRock did not, however, vow to vote more often against companies' management, saying that it still prefers private meetings with executives and that critical proxy votes are a last resort.  BlackRock also said it will seek to understand how companies are working to increase boardroom diversity.  "Diverse boards, including but not limited to diversity of expertise, experience, age, race and gender, make better decisions," it said in the documents.

Bowleven's board will resign on Tuesday, capitulating to Monaco-based Crown Ocean Capital.  The investor, which owns a 15.56% stake in the oil and gas explorer, wants to replace six of the seven board members and restructure Bowleven into a holding company to return money to shareholders.  Bowleven's CEO, chairman, and all but one member of the board reportedly will step down at the general meeting on March 13.  A source said Bowleven's board realized it would lose the vote after shareholder Artemis, which had previously supported the board, sold its stake in Bowleven last week.

Fox Business reported Friday that Nelson Peltz of Trian Partners is pushing Jeffrey Immelt, the CEO of General Electric (GE), toward early retirement. The network said it learned from sources that Peltz was "concerned about [GE] missing recent earnings targets," and Trian was debating whether to engage the company if GE did not reach earnings targets or begin to surpass the S&P 500. Shares of General Electric jumped more than 2% on Friday. According to its latest filing with the Securities and Exchange Commission, Immelt received a $21.3 million compensation package last year, down about a third from the previous year.

Ciber Inc. (CBR) disclosed that Legion Partners Asset Management LLC has notified the company of its intent to nominate two individuals for election to the board at the 2017 annual shareholders meeting. Ciber said it is committed to acting in stockholders' best interests and that it welcomes investor feedback.

A proxy challenge has halted Seattle Genetics' (SGEN) move to license a potential cancer drug developed by New Jersey-based Immunomedics (IMMU).  Seattle Genetics agreed in February to pay $250 million upfront for the licensing deal; but future milestone and royalty payments could put the true value closer to $2 billion, the companies agreed.  However, a Delaware judge on Thursday issued a temporary restraining order barring Seattle Genetics from closing the IMMU-132 licensing deal for at least a month.  VenBio—the top Immunomedics shareholder, with a 9.9% stake—believes the company is mismanaged and is seeking to remove four controlling board members.  The investor portrays Immunomedics' Seattle Genetics deal as management's last-ditch attempt to cling to control and scuttle an organized bidding process that could have secured a better deal.  VenBio says its nominees for the board were endorsed by proxy advisory firms ISS, Glass Lewis, and Egan Jones; and it claims to have shareholder support.  Ahead of the company's shareholder meeting on March 3, another judge refused to grant Immunomedics a temporary restraining order in a separate federal court suit seeking to invalidate VenBio's proxy votes, which claimed VenBio had violated proxy contest laws.  Until the litigation in both courts is resolved, it is unlikely Seattle Genetics can complete its deal and advance planned Phase 3 clinical trials of the candidate drug.

Macellum Capital Management is angling to install four new members on the board of Savannah, Ga.-based CitiTrends (CTRN).  The investor, holding a 3.9% stake, informed shareholders on Thursday that the chain is underperforming.  CitiTrends, which operates more than 500 discount stores in 33 states, countered in a letter that it "believes its current board is comprised of highly qualified individuals."

PHH Corp. (PHH) Thursday issued a statement in response to EJF Capital's filing on Schedule 13D of its intention to nominate two candidates to the PHH Board of Directors. "PHH maintains and values an active dialogue with our investors, and is focused on generating value for shareholders. We appreciate EJF Capital's input and will continue our dialogue with them and our other shareholders. The Corporate Governance Committee of the Board regularly reviews Board composition to ensure shareholders are represented by high-quality, independent directors with relevant skills and experience. Our Board of Directors and management team recognize the right of investors to nominate directors. In keeping with our normal corporate governance practices, the Corporate Governance Committee will review EJF Capital's director candidates."

On March 9, U.S. Securities and Exchange Commission (SEC) Commissioner Kara Stein raised questions about Snap Inc. (SNAP) and other companies that offer shareholders unequal voting rights, which she said "present complex and new issues that need to be understood and addressed." Furthermore, she said, "We also must be mindful of the precedent being created" and that the agency should "focus on how some innovations may prove detrimental to investors." Snap's unprecedented move involved selling shares to outside investors that did not include any voting rights. "What is the effect on capital formation and emergent public companies when the bundle of rights offered to shareholders in a public offering excludes voting rights?" Stein asked. Ken Bertsch, executive director of the Council of Institutional Investors, noted that share structures like Snap's pose risks and that the SEC should conduct further reviews, including with stock exchanges that list companies with unequal voting rights. "At some point," Bertsch said, "there's some question of market confusion and a disabling of passive strategies."

American International Group Inc. (AIG) Thursday announced CEO Peter Hancock will step down after two years leading the insurance conglomerate, following a big setback in its turnaround plan.  The board was expected to discuss Wednesday whether to replace Hancock following the company's $3.04 billion fourth-quarter loss.  Hancock's exit marks a success for Carl Icahn, who had called for a new leader at AIG in late 2015, before agreeing with the insurer to appoint a representative to the board.  In response to Thursday's announcement, Icahn tweeted, "We fully support the actions taken today by the board of AIG."  Following last month's lackluster results, some analysts began proposing possible replacement candidates, saying the company may need someone with extensive insurance experience, which Hancock lacked before joining AIG.  Hancock had been seeking to bring AIG's performance in line with peers by the end of 2017, working with a timetable he and the board announced in January 2016.  That timetable was created amid the calls in late 2015 by Icahn and billionaire investor John Paulson for a breakup of the company.  Those promises were key in the investors' decision to decline a board fight last year, and last spring Paulson joined the board alongside Icahn's representative, Samuel Merksamer.  Over the past year, Hancock's team has been selling operations and assets to appease investors' demands for a more efficient and focused company, including selling its lucrative U.S. mortgage-insurance business.

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The Morning Risk Report: Exclusive Forums, Proxy Access Are Hot Governance Issues
" Wall Street Journal (03/28/17) DiPietro, Ben"

Numerous publicly traded companies in the San Francisco Bay area want to limit the jurisdiction where a stockholder derivative class-action lawsuit can be filed, notes a report by law firm Orrick that examines 153 companies. Furthermore, some of the companies are adopting some form of proxy access; while others are requiring directors to win a majority of votes before they can gain or keep their seat. Ed Batts, global leader of Orrick's mergers and acquisitions and private equity practice, says companies increasingly are altering their incorporation bylaws or other rules to stipulate where shareholder lawsuits can be filed. Fifty percent of companies have such a stipulation, and more are adding the provision. Meanwhile, fewer than 20% of companies have implemented proxy access provisions; but that number could rise to 50% in 2018 and 75% soon after, Batts predicts. Of the companies surveyed that do not have dual-class shares of common stock that allow founders to retain super-voting rights, 70% have a rule requiring a board nominee to get a majority of votes in support to win the seat in an uncontested election. Batts says the Bay Area trend has implications for companies elsewhere—namely that they need to tune in to some of these governance issues before activist investors sniff them out.

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Want Change? Shareholders Have a Tool for That
" New York Times (03/24/17) Morgenson, Gretchen"

With millions of shares outstanding at large companies, it is hard to believe that an individual investor's vote can make a difference. However, the stakes are higher this year for investors who junk corporate proxy statements and decline to take part in director elections and other governance matters because they believe their vote will not count, writes Gretchen Morgenson. Investors may want to take a more active approach to proxy voting if they are concerned about the Trump administration's plans to roll back regulations throughout corporate America. Shareholder votes in favor of holding executives accountable on executive pay, climate change issues, and other governance matters are especially important because the new leaders of the U.S. Securities and Exchange Commission and the U.S. Environmental Protection Agency are expected to relax their agencies' oversight. Shareholder proposals are typically not binding, so companies are not required to abide by them. Still, managers are usually loath to ignore the wishes of a majority of their shareholders. Investors who own shares in mutual funds can write to the fund's executive and tell them how they want them to vote their shares. "There's never been a better time to address these issues, whether as an institutional investor or an individual," says Nell Minow, vice chairwoman at ValueEdge Advisors.

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Why PPG's Bid to Take Over Akzo May Fail: QuickTake Q&A
" Bloomberg (03/24/17) Canny, William; Proper, Ellen"

Despite growing pressure from shareholders, Dutch paint maker Akzo Nobel NV has rebuffed two acquisition offers from U.S. rival PPG Industries Inc. (PPG).  Akzo can afford to be defiant because of a big defense called stichting, which amounts to strong anti-takeover measures. Stichting is a centuries-old legal structure used by many Dutch companies, and the goal at Akzo Nobel is to defend against takeovers.  Akzo has three share classes: common shares, cumulative preferred shares, and priority shares. The priority shares are Akzo's weapon, held by the Foundation Akzo Nobel.  Priority shares carry the right to appoint members to the management and supervisory boards and to approve changes to the company's Articles of Association.  This means the foundation could design a "poison pill" defense, issuing new shares to make any takeover attempt more challenging.  Elliott Advisors, which owns a 3.25% interest, has called on management to engage with PPG and has threatened to try to overhaul management and the board if they refuse.  If this does happen, the foundation could simply appoint a new board that is sympathetic to their cause; and they could also add a "poison pill" defense if PPG decides to make a hostile takeover bid.  It is not clear what happens now.  PPG CEO Michael McGarry said last week that a hostile bid remains an option after Akzo rejected its latest $24 billion overture.  He also predicted that Akzo's foundation would not block the takeover attempt.  Meanwhile, pressure is growing from shareholders including Akzo's largest investor, Causeway Capital Management LLC.  

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Investors Walk Away From Activist Funds as Performance Deteriorates
" ValueWalk (03/21/17) Hargreaves, Rupert"

Investors are distancing themselves activist hedge funds, according to a report from Eurekahedge.  Assets under management fell below the benchmark $100 billion threshold as of February 2017, and net outflows have topped $5.3 billion in the past year due to poor investment performance and the wind-down of some major funds.  "Activist hedge funds posted impressive returns in 2013 on the back of an active [merger and acquisition] scene," states Eurekahedge.  "However, this was short-lived in the years following that when some high-profile M&A deals within [the] healthcare sector fell through.  In 2015, activist hedge funds posted their first negative annual returns in five years, down 0.34%, with some M&A deals failing to close, citing legislative hurdles."  Activist hedge fund assets under management have fallen to $97.9 billion; and so far in 2017, it seems unlikely that investors will reconsider the sector in the foreseeable future.  Activist hedge funds have lost 0.74% year to date, compared with a return of 1.87% for the rest of the hedge fund industry.  In 2016, by comparison, they returned 7.13% while the rest of the industry gained 4.53%.

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Shareholder Uprising: Santander, UFJ, Sumitomo and a Number of Other Banks Are at Risk
" City A.M. (03/20/17) Goldsmith, Courtney"

New research by MSCI has identified a number of banks that could come under pressure from shareholders. The analysis found that 58% of banks are located in countries facing potential governance shifts; of those, 17% are at risk of being engaged by shareholders due to weaknesses in board efficacy, lower than average return on equity, and few restrictions to potential shareholder activism. MSCI flagged 20 banks which are most likely to be engaged by activist investors with broader rights and governance mandates. Many Japanese banks were said to be at high risk, including UFJ, the biggest bank in Japan, and Sumitomo Mitsui Fin. Banks also face potentially major headwinds to meet investor demands. Santander was flagged as a medium risk, but interestingly it is the only bank also at risk of changing populist policies. MSCI said: "Notably, Santander makes an appearance on our list, and while the bank may face more moderate governance shifts, it is the only bank of the set we found to be both a likely target of governance reform and heavily exposed to populism simultaneously." MSCI said Lloyds and Santander could be affected by interest rate rises as they stick out with major loans to economically sensitive borrowers.

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Hyundai's Governance Journey
" IR Magazine (03/21/17)"

Corporate governance has been pushed to the forefront in South Korea in recent years, and Hyundai Motor Co. is one company that has taken steps to increase transparency and communication. Although initially spurred into action by a large foreign shareholder, Hyundai has since taken proactive steps, including launching one of the first governance roadshows by a Korean company and an English-language governance charter. However, Zayong Koo, vice president and head of investor relations at Hyundai, notes that "there's no perfect route to governance, and there are many more things that need to be improved in the future." At the auto maker's annual general meeting in 2015, management pledged to study ways to bolster shareholder value, and within weeks, the company announced a corporate governance and communication committee made up of four independent directors. At the top of its agenda at its governance roadshow that year was an introduction to the new committee and the enhanced role of outside directors; a large portion of each meeting was devoted to listening to shareholders. In response to investors' wishes, Hyundai unveiled a new corporate governance charter—posted online in English and Korean—at its annual meeting in March 2016. It was written as a guidebook to the role of Hyundai's board of directors and the board's activities. Koo says Hyundai's investor relations team has been energized by these activities, noting that "it's just the beginning."

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Snap IPO Igniting Furor; Institutions Not Pleased
" Pensions & Investments (03/20/17) Bradford, Hazel"

Snap Inc.'s (SNAP) recent IPO and the absence of shareholder voting rights have generated a furor among large institutional investors and asset managers who are working to prevent the company from setting a precedent among corporate issuers. The $3.4 billion IPO on March 2 made Snap the first U.S. company in recent history to go public with non-voting shares, with its two co-founders retaining more than 90% of voting power. The Council of Institutional Investors (CII) is leading the charge against trimming or eliminating public shareholder voting rights. In a Feb. 3 letter to Snap co-founder and Chairman Michael Lynton, CII Executive Director Ken Bertsch and 18 CII members acknowledged that in recent years, "some young companies with dynamic leadership and promising products, like Snap, have attracted capital on public markets [despite having dual-class structures]. However, the performance record of dual-class companies is decidedly mixed in the long run and even in the medium term. Some companies lacking effective accountability to owners do soar for a time, but others crash and burn, and still others pursue mistaken strategies for far too long." Furthermore, at a U.S. Securities and Exchange Commission (SEC) investor advisory committee meeting on March 9, Bertsch said committee members "have watched with rising alarm for the last 30 years as global stock exchanges have engaged in a listing standards race to the bottom," and with Snap's NYSE listing that came with no shareholder voting rights, "perhaps the bottom has been reached." Also at the meeting, Rakhi Kumar, Boston-based managing director and head of ESG investments and asset stewardship for State Street Global Advisors, said voting rights are crucial for institutional investors relying on indexes "because your voice is only as loud as your controlling interest in a company." Bertsch urged the investor committee to work with the SEC to review the adequacy of exchange rules on voting rights. A more likely avenue for change is through the index providers; one idea being floated is creating a new index that excludes companies with unequal voting rights "so these companies have a way of measuring themselves against other companies," said Jim Allen, head of Americas capital markets policy for the CFA Institute.

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It's Good to Be a CEO, Again: Stocks Rise, and So Does Pay
" Wall Street Journal (03/20/17) Francis, Theo; Lublin, Joann S."

Median pay for the CEOs of about 100 of the biggest U.S. companies rose 6.8% for fiscal 2016 to $11.5 million, on track to set a post-recession record, according to a Wall Street Journal analysis. Twice as many companies boosted their bosses' pay as reduced it, though a few high-profile chiefs took significant pay cuts. The results suggest the 2015 slowdown in CEO pay was temporary. Median annual pay for a larger sample of CEOs last year fell to $10.8 million, with most getting a pay cut or just a small raise. The higher pay was awarded as the stock market surged and corporate profits rebounded over the course of 2016. David Yermack, a finance professor at New York University's Stern School of Business, said regular shareholder votes on executive pay have forced boards to better tie CEO pay packages to performance. Meanwhile, Dieter Waizenegger, executive director of CtW Investment Group, says companies could still do more to connect leaders' compensation with long-term corporate performance.

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Investors Take a Page From Greenpeace, Pushing Companies for Change
" Wall Street Journal (03/19/17) Benoit, David"

More large investors are prodding companies on social and environmental issues, contending they can impact long-term value. For example, index fund State Street Global Advisors earlier in March publicly challenged companies to put more females on their boards. Just this past week, BlackRock Inc. (BLK) announced it would press companies to be more transparent about the potential effects of climate change on their bottom lines. According to a December study from Bank of America Merrill Lynch, "sustainable, responsible, and impact investing" funds account for some $9 trillion in assets under management in the United States and have grown 33% a year over the past two years. Researchers further found that companies that scored in the top 33% on environmental, social, and governance characteristics relative to their peers outperformed stocks in the bottom third by 18 percentage points.

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Why Shareholder Votes Against Auditor Ratification Are Rare
" AccountingWEB (03/16/17) Sheridan, Terry"

Auditor ratification votes give shareholders an opportunity to say what they think about a company's auditor, but historically, only 2% vote against changing audit firms. A recent study published by the American Accounting Association points out the deficiencies in auditor ratification. According to the study, proxy advisors "conduct independent research and provide summarized voting recommendations, for or against, that assist shareholders in synthesizing information and making effective voting decisions. Proxy advisors are engaged by, and paid by, subscribing shareholders. [However, proxy advisors often are criticized] for making recommendations that are one-size-fits-all rather than geared to the specifics of a company. But when it comes to key issues related to auditor ratification, they don't even seem to be following their own checklists." The study indicates that those checklists or guidelines are based on shareholder feedback, and if shareholders do not respond to signs of poor audit quality or fail to emphasize audit quality proxies in the advisor guidelines, proxy advisors "will be less likely to issue an against recommendation for poor audit quality absent obvious signals of audit failure." The study notes that there could be more against recommendations for auditor ratification if investors and other interested parties delved deeper into the "proxying for poor audit quality." Furthermore, if audit committees do not provide sufficient details about their interactions with auditors, shareholders will not pay as much attention to audit quality. "Availability bias suggests that users of information consider information that is easily retrievable," notes the study. "Proxy advisors may be less willing to issue against recommendations based on suspected poor audit quality because it lacks clear and centralized disclosure." Even if shareholders recommend changing the auditor, the total percent of dissenting votes often does not hit the benchmark that the audit committee considers necessary to make changes, particularly when these votes are voluntary and request ratification of what the audit committee has already decided, says the study.

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Is It Time for You to Implement a Virtual Annual Meeting?
" Lexology (03/15/17) Christensen, C. Brophy; Heyduk, Shelly; Plesnarski, Robert"

An increasing number of prominent public companies have started to replace in-person annual meetings with virtual annual meetings conducted exclusively online. Virtual annual meetings offer benefits to both companies and shareholders, such as eliminating the cost of an in-person meeting, but they also have their downsides. Certain institutional shareholders and shareholder activists believe that virtual meetings are less personal and that there is the potential for management to pre-screen questions to avoid addressing shareholder concerns. In addition, virtual meetings may make voting outcomes less certain because the ease of shareholder voting means that more shareholders may wait until the meeting to vote their shares (rather than submitting their proxies in advance) or may make last-minute changes to their votes. To address and mitigate such issues, companies should adhere to established best practices, such as the guidelines published by the Best Practices Working Group for Online Shareholder Participation in Annual Meetings, according to C. Brophy Christensen and colleagues at O'Melveny & Myers. Companies seeking to hold virtual-only meetings could face some onerous conditions at the state level and their governing documents must allow them. Christensen and colleagues also say companies must focus on planning and logistics to ensure meetings are free of technical glitches.

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After Scandal and Shakeup, Banc of California Wants to Be Boring Again
" Los Angeles Times (03/17/17) Koren, James Rufus"

Banc of California, accused of insider dealing and connections to a convicted fraudster, has seen many changes in recent months—including revised corporate governance policies and the resignation of Chairman and CEO Steven Sugarman and Vice Chairman Chad Brownstein.  In a deal announced March 13, the bank will add two board seats—bringing the total to nine—and will consider investor Legion Partner's nominees for the new positions.  Legion, which has a 6.6% stake in Banc of California, will in turn vote for the board's nominees.  Previously, the bank's strategy was "grow, grow, grow, grow," says analyst Tim Coffey of brokerage and investment bank FIG Partners.  "Now, they're shifting focus from growth to profitability."  To that end, the bank has announced the sale of its home loan division to Texas firm Caliber Home Loans.  It also intends to lay off 139 employees at its corporate offices and is seeking to cut expenses.  The bank's new chairman, Robert Sznewajs, has 40 years of experience working for national and regional banks.  Furthermore, two new board members, Richard Lashley and Kirk Wycoff, have bank-related experience and are both longtime shareholders in Banc of California through their investment firms.  "We've covered a lot of ground in the last 90 days," says Brad Vizi, a managing director at Legion.  "The CEO is gone, we'll have a new one coming in soon, we've turned over half the board, and we've gotten out of the mortgage business."

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Unilever and the Failure of Corporate Social Responsibility
" Forbes (03/15/17) Borelli, Tom"

According to former shareholder activist Tom Borelli, Ph.D., Unilever (UL) CEO Paul Polman is "a poster child of a CEO gone rogue." He says Unilever has suffered financial and public relations damage since Polman assumed leadership of the company in 2009, blaming Polman's "disastrous leadership." Borelli says, "At the core of Polman's problem is his eagerness to put superficial feel good policies ahead of sound business decisions and he is not shy about touting his twisted priorities. ... Despite Polman's efforts to make Unilever a good corporate citizen, Unilever was mired in environmental and sexual harassment controversies. ... And just this month, Unilever's South African business was accused of collusion with a competitor by the country's Competition Commission: fines of up to 10% of annual turnover could be levied as a result." Borelli argues that Polman's focus on social matters has distracted him from addressing core business challenges, and in the fourth quarter of 2016, Unilever's sales grew just 2.2%, falling short of analysts' expectations of 2.8%. Sales for all of 2016 were 3.7% below Wall Street's estimates of 3.9%. He believes Polman's biggest mistake was rejecting a $143 billion takeover effort from Kraft Heinz (KHC), as Unilever's stock increased about 15% after the bid became public but slipped 8% after the offer was rejected. Furthermore, the offer of $50 per share represented an 18% increase from its share price before the takeover bid and would have valued the company at 24 times its 2016 earnings. Borelli questions whether "Polman rejected the takeover offer because it could prevent him from using Unilever to advance his personal political agenda," and he calls for shareholders to oust Polman as CEO.

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Board of Directors Compensation: Past, Present and Future
" Harvard Law School Forum on Corporate Governance and Financial Regulation (03/14/17) Lerner, Diane"

There has been a fairly major shift in how outside corporate directors are compensated over the past two decades, which is attributable to a series of corporate governance initiatives. Chief among them is the 1996 NACD Blue Ribbon Commission Report on Director Professionalism, which was an extremely influential report covering the recommended roles and responsibilities of the board. It included robust recommendations to pay directors with cash and equity and to dismantle director pension and benefits programs because they created too much alignment with the existing senior management team. In addition, it was one of the earliest proponents of having an independent director tasked with certain board activities, eventually leading to an increase in the prevalence of lead director appointments.

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Procter & Gamble: Trian Partners at Work
" Seeking Alpha (03/14/17)"

Nelson Peltz's Trian Partners has taken a $3.5 billion stake in Procter & Gamble (PG), amounting to the biggest stake the fund has ever taken in a stock, but Peltz has yet to lay out any plans for the company. P&G's announcement that it is selling its Lindor brand, marking the selloff of more than 100 brands since 2014, is being viewed by some as a sign that the company has taken notice of Peltz's presence and is being its own activist of sorts. The company is working to refocus its portfolio on "growthy" brands that generate plenty of money to fund its dividend, which yields 3% and has increased annually for 60 years. Among the company's biggest moves have been its spinoff of its 40 beauty brands to Coty (COTY) and the sale of its Duracell batteries brand to Warren Buffett. Observers believe Trian likely will get P&G to either sell or spin off its Gillette brand in response to competition from razor startups and efforts to cut prices to spur growth. The fund also could push the company toward a full-blown split, which generally results in a near immediate increase in share price. However, observers note that P&G is not being undervalued, with its stock trading at 26 times earnings, but has a sales and growth issue.

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The Most Important Player in the AIG CEO Resignation: Carl Icahn
" Wall Street Journal (03/14/17) Lublin, Joann; Scism, Leslie"

The key person at the center of last week's surprise change atop insurance giant American International Group Inc. (AIG) was not CEO Peter Hancock.  It was billionaire investor Carl Icahn.  Hancock agreed to resign as chief executive after several directors met with him Wednesday evening in his AIG office, according to people familiar with the matter.  Some directors at the time were worried about the CEO's ability to continue improving the company's results amid a potential fight with Icahn.  The huddle followed a private session of the company's independent directors in which they had discussed Hancock's successes and shortcomings, adding new detail to last week's sudden shake-up at AIG.  That "executive session" occurred after a two-day board meeting, during which Hancock and his team highlighted accomplishments in trying to bring AIG's results in line with the best of its peers.  Hancock has agreed to stay on until a successor is found.

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Corporate Governance Trends in Europe
" IR Magazine (03/13/17)"

Current trends in corporate governance focus on a combination of disclosure, reporting, and transparency.  Regarding investor calls for better disclosure of dividends, the Financial Reporting Council's Financial Reporting Lab found that only 28 of the 177 FTSE 350 companies that published an annual report between November 2015 and July 2016 improved their disclosure of dividends. Financial reporting is under the spotlight as well, giving the move toward the European Single Electronic Format for EU issuers to report company information beginning Jan. 1, 2020. Meanwhile, Steve Nightingale, director of IR for FTSE 250 company Britvic, says, "The main subject of discussion for us at the moment is around board succession planning, as the chairman has been in the role since 2005 and is due to rotate off. Likewise, the constitution of the board and support/challenge role to the executive team is an important topic. Finally, the principles of remuneration and engaging with shareholders ahead of changes to targets was a key theme last year." He adds, "We reach out to major holders ahead of proposed changes to remuneration policy or other areas such as audit or succession planning each year before the annual report is published and ahead of the AGM voting season. Likewise, we engage with the main proxy bodies, such as ISS or Glass Lewis, as best we can."

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Poor Financial Performance Key Driver for Investor Support for UK Activist Campaigns
" IR Magazine (03/09/17) Holt, Andrew"

The Institutional Investor Survey 2017 by the global consultancy firm Morrow Sodali indicates that poor financial performance is the main driver for traditional investor support for activist campaigns in the United Kingdom, followed by companies not acting on previous shareholder dissent. These factors suggest that companies would be wise to continuously review their governance practices and disclosures and identify key areas for improvements through effective communication and dialogue. All of the respondents said they will communicate with activists, with nearly 60% noting they will listen to the activist only if approached and 40% expressing a willingness to also reach out to activists. All respondents also confirmed that they will vote against the compensation/remuneration committee chairs or members in the case of chronic poor pay practices in 2017. According to Morrow Sodali director Reza Eftekhari, "In the UK, executive pay is expected to once again dominate the agendas for both investors and companies ahead of the AGM season. Since the introduction of the binding vote on remuneration policies three years ago, this is the first time UK companies are required to renew their policies. While many companies are expected to make some adjustments to their current policies, the structure of their executive pay is expected to remain largely unchanged. This might seem to be a safe approach but just because their policy worked three years ago, it doesn't mean it would still be relevant and in line with the market's best practice today. As such, companies need to engage with their key investors and explain the changes in well-timed and well-structured consultations. Companies need to understand who is responsible for making the voting decision and what internal and external factors influence such decisions."

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As Dodd-Frank Repeal Looms, Shareholders Gird for Annual Meetings
" Wall Street Journal (03/09/17) Monga, Vipal"

Shareholders will continue their push for change at annual meetings this spring, despite a foggy regulatory landscape that could alter disclosure rules after this year, according to a new report by Broadridge Financial Solutions and the corporate governance arm of PricewaterhouseCoopers LLP.  "There's a lot of uncertainty, but governance has advanced.  I don't think we're going to roll back the clock on such things as say-on-pay," said report co-author Chuck Callan, senior vice president for regulatory affairs at Broadridge.  This year's meetings are more likely to focus on director performance.  Broadridge believes Institutional Shareholder Services and Glass, Lewis & Co. are prepared to recommend votes against many directors who serve on more than five boards, on the grounds that they are overloaded.  Big investors like Blackrock will continue to press boards to adopt strategies to emphasize long-term investments over shareholder buybacks, according to the report.  Other investors have already indicated they will use their holdings to encourage greater diversity.  Index-fund giant State Street Global Advisors said this week it will begin pressuring companies to place more women on their boards, for example.  This year could also be the last before a GOP-dominant Congress and the Trump administration repeal parts of the Dodd-Frank law of 2010, which included many corporate disclosure rules.  Companies may not be required to reveal how much CEOs are paid relative to the median employee, for example, but shareholders in recent years have backed "substantive disclosure" on corporate efforts to promote social and environmental policies, the report said.  Their demands for more detail on such issues could continue, regardless of what happens in Washington, Broadridge said.

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