Activist Database

Activist Deadline Calendar & Standstill Database

Featuring standstill agreement and nomination deadline windows, provisions and timelines

Media Center

Featuring all breaking news and in depth articles and editorial press coverage pertaining to shareholder activism and corporate governance.
Nestle Focuses on Factories, Procurement to Hit Cost-Cutting Goal
Nestle Still Committed to Global Confectionery—CEO
Japan Investors Flock to Stocks Engaged by Activists
Investors Get More Backing for Change at PDC Energy
Daniel Loeb's Hedge Fund Wants Centene to Consider Selling Itself
Hostile Takeover Tactics Come to the World of Small Private Lending
Navient Elects First Female Board Chair
SEC Adds Proxy Advisors, Shareholder Proposal Thresholds to Regulatory Agenda
Legg Mason Cuts 12% of Staff in Revamp as Peltz Joins Board
D.E. Shaw's Koffey Leaves Hedge Fund
Alton Towers Owner Merlin Urged by US Investor to Go Private
EQT Files Definitive Proxy and Mails Letter to Shareholders
How a Sleepy Texas Trust Turned Into Permian Oil Proxy War
Canopy's Proposed U.S. Deal Is a Boon for the U.S. Cannabis Sector, Says This Investor
Nissan Board Nominees Not Broaching Merger Issue: Member
HKEx Sets Guidance on Board Diversity
SRD II Requirements for Proxy Advisory Services
Video: Oasis Management's Fischer on New Japan Fund, Corporate Governance, Chaebols
Texas Pacific Investors Say Nominee Elected Trustee at Disputed Meeting
Big Super Fails to Back Shareholder Resolutions
Telecom Italia Chief Favors Network Control in Any Open Fiber Tie-Up
Icahn-Backed Oil Refiner CVR Energy Considers Options
Coming This Summer: SEC Roundtable on the Impact of Short-Termism
Investor Adviser Gives 'Final Warning' Over Promoting Senior Women
Voce Issues Statement Regarding Argo Proxy Contest
FirstEnergy Shareholders Approve 7 Measures at Annual Meeting
Shareholders May Engage Pot Stocks Next
Fortum Makes Progress in Talks to Resolve Uniper Standoff
PPG Won't Break Up, Despite Pressure From Investor
Institutional Investors Calling on Companies to Do More Around Disability Inclusion
Front Yard to Explore Alternatives
Kimmeridge Corrects Inaccuracies in PDC CEO's Letter to Shareholders
Podcast: Preventing Activist Engagement This Proxy Season
For the First Time, Amazon Faces an Enormous Slate of Shareholder Proposals
Mack-Cali Board Ends Settlements Talks With Investor Bow Street
Texas Land Bank Proxy Fight Turns Ugly as Dissident Nominee Sued
ValueAct Founder Joins Board of Agritech Start-Up AppHarvest
Sony CEO Stresses Value of Sony Pictures Entertainment at Strategy Briefing
Blackstone, Whiting, Callon Consider Bids for Shale Driller QEP
Fare Value
Campbell Asks International Division Bidders to Reconfirm Offers
'Poorly Managed' Cenkos Pressured to Acquire Rival Broker
Deja Vu at Sony With Investor Loeb Back in the Picture
Foreign Fund 'Not Satisfied' After Kyushu Railway Refuses Proposals
Mack-Cali Alleges Conflict of Interest in Investor's 'Clarifications'
Coast Capital Refiles FirstGroup Requisition Meeting After Error
Fortum Must Shoot Down Investor Proposals for Uniper—Union
Keith Meister's Corvex Reaps Gains From Revamped Portfolio
PDC Energy President & CEO Bart Brookman Mails Letter to Shareholders
Legg Mason Appoints Nelson Peltz and Ed Garden of Trian Partners to Board of Directors
Elliott Management Opposes Airline Azul on Avianca Brasil Bankruptcy Plan
Voce Capital Takes Aim at Insurer Argo
U.S. Investor Urges First Group to Split and Pull Out of 'Destructive' U.K. Rail Network
ISS Backs Investor Kimmeridge's Two Nominees to PDC Board
Mal Durkee Joins Opus Bank as Elliott's Director Designee
Bill Ackman's Pershing Square 1st Quarter Letter to Shareholders
Turmoil at Thyssenkrupp Marks Battle for Germany's Economic Identity
EQT Corp. Proxy War With Rice Brothers Heats Up
Blue Lion Files Proxy Statement Seeking to Replace Two HomeStreet Directors
Trian Nears Settlement With Legg Mason, Could Get 3-to-4 Board Seats
U.K. Shareholder Activism and Battles for Corporate Control
In Light of Ever-Increasing Cybersecurity Risks, Boards Must Deepen Their Oversight and Engagement
Hedge Funds Start to Figure Out Socially Responsible Investing
Coast CIO Interview: FirstGroup CEO in Job 'A Year Too Long'
The Specter of the Giant Three
Shareholder Activism: Boards Need to Assess Vulnerabilities
Amazon Faces Investor Pressure Over Facial Recognition
SEC's Clayton Redefines 'Short-Termism' Concerns to Focus on Deregulatory Agenda
A Top Aurora Cannabis Exec Dishes About What It's Like Working With Famed Investor Nelson Peltz
Wanted: Activist Investors in the UAE
The Activist Effect
Booming Buybacks Aren't Likely to Wane Despite Market Volatility
Corporations Are Holding Off Investors–but for How Long?

Voting Database

A new searchable database featuring the comprehensive voting records of all top institutional investors. This includes every proposal that was up for a vote and how the investor voted.

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13D Monitor | In The Media

5/24/2019

Nestle Focuses on Factories, Procurement to Hit Cost-Cutting Goal

Wall Street Journal (05/24/19) Trentmann, Nina

Swiss consumer-goods company Nestle SA (NSRGY) is adjusting its manufacturing process to generate savings. The company's chief financial officer told The Wall Street Journal that the company is focusing on boosting efficiency and consolidating procurement to reach its cost-cutting goal for 2020. Nestle is already about halfway to its 2016 goal of 2.0-2.5 billion Swiss Francs in savings, of which it has achieved CHF1.2 billion, but its manufacturing has achieved only 35% of its planned savings, compared to the 65% achieved by its procurement operations. Nestle is currently closing one plant a month, repurposing some facilities, and transferring manufacturing functions between plants. These cost cuts have improved Nestle's margins, capital expenditures, and working capital. Nestle did not provide a forecast for 2019 or a fixed target for job cuts.

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5/24/2019

Nestle Still Committed to Global Confectionery—CEO

Reuters (05/24/19) Revill, John

Nestle (NSRGY) CEO Mark Schneider announced that the company is still dedicated to confectionery, despite divesting its U.S. chocolate operations during a review of the business. "Our wide portfolio makes us strong...not everything is going to change," Schneider noted. "You have to find focus and areas where you concentrate your efforts," which for Nestle include water, baby food, and animal food. "Sweets are not among those," Schneider acknowledged. "But we also want to exploit the opportunities of that market." The CEO stressed efficiency as critical, and the company has had to adapt to changing customer preferences, along with ever-rising price pressure from consumers. A key source of strain for Nestle is from Daniel Loeb's Third Point, which demanded a faster turnaround in 2018. "We have a wide range of shareholders...everyone has the same rights, all of their priorities have to be listened to," Schneider stated.

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5/24/2019

Japan Investors Flock to Stocks Engaged by Activists

Nikkei Asian Review (05/24/19) Hasegawa, Takehiro

Japanese investors are buying stocks in which hedge funds have taken an interest. On May 23, shares of Japanese online life insurance provider Lifenet Insurance jumped 14%, a day after Singapore-based hedge fund Effissimo Capital Management bought more than 5% of its shares. Likewise, Leopalace21, a rental apartment operator, rose 5% on May 23 after Reno, an equity fund backed by investor Yoshiaki Murakami, increased its stake. Activist-engaged stocks have gained appeal as shareholders begin to focus on corporate governance and demand more transparency in the results of shareholder votes. Furthermore, a source at a domestic brokerage noted the inflow from retail investors and other short-term fund sources, which suggests that this group is looking for assets immune from the U.S.-China trade war.

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5/24/2019

Investors Get More Backing for Change at PDC Energy

Bloomberg (05/24/19) Deveau, Scott

Lion Point Capital has announced that it plans to vote in favor of Kimmeridge Energy Management's three nominees for the board of PDC Energy Inc. (PDCE), noting that the company requires changes at the board level to bolster its performance. Jay Johnson, an analyst at Lion Point, which owns a 2.3% stake in PDC Energy, said in an interview, "The focus on reducing costs and giving additional oversight over all strategic options reviewed by the board is important. We think Kimmeridge will do a good job providing that level of oversight." PDC Energy has been embroiled in a proxy fight with Kimmeridge, which owns a 5.1% stake and has argued that the company's investors have suffered poor returns due to its flawed acquisition strategy and operational shortcomings. Kimmeridge is calling on the company to improve its capital allocation, reduce costs, return cash to shareholders, and pursue acquisitions to grow scale. Lion Point agrees, with Johnson adding that the "first step is getting costs in line."

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5/24/2019

Daniel Loeb's Hedge Fund Wants Centene to Consider Selling Itself

Wall Street Journal (05/24/19) Lombardo, Cara

Sources say Daniel Loeb's Third Point has built a stake in Centene Corp. (CNC) and wants the health insurer to consider selling itself before spending $15.3 billion to acquire WellCare Health Plans Inc. (WCG). One of the sources said Third Point owns at least $300 million in Centene shares, and with derivatives, the hedge fund could have significantly more exposure to Centene's stock-price movement. Other sources note that Corvex Management LP and Sachem Head Capital Management also have built stakes in Centene, and that those firms believe Centene might not have considered all alternatives, such as a sale to Humana Inc. (HUM), before agreeing to buy WellCare. Given that Third Point is one of the largest and most closely watched hedge funds, observers believe its involvement could hold more sway with Centene shareholders. Sources indicated that the funds want Centene to sound out any potential buyers for the company but are not necessarily planning to solicit votes against the WellCare deal. Further, they note that Third Point in recent days filed for antitrust clearance, which is necessary if the firm wants to raise its stake and get involved with business decisions at Centene.

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5/24/2019

Hostile Takeover Tactics Come to the World of Small Private Lending

Bloomberg (05/24/19) Lee, Lisa

Highland Capital Management is seeking to oust two directors at Medley Capital Corp. (MCC), a business development company (BDC) controlled by twins Seth and Brook Taube, who are trying to merge it with their other companies amid a sharp decline in performance. Highland, which holds a small stake in MCC, says the plan is flawed and is proposing to manage MCC. "There has been an uptick in shareholder activism in the BDC space in the last three to four years," said Schulte Roth & Zabel LLP partner John Mahon. "Highland's proxy move is a new step in activism in its aggressiveness. If Highland succeeds, that could bring more activism to the BDC world." Highland's proxy battle through its affiliate, NexPoint Advisors LP, follows FrontFour Capital Group's opposition to the Taubes' proposal to combine MCC with their Sierra Income Corp. and Medley Management Inc. (MDLY). FrontFour, a larger shareholder in MCC, has argued that the merger transfers $120 million away from shareholders, based on MCC's stock price decline after the deal's announcement in August. FrontFour sued in Delaware Chancery Court, which agreed with the firm's claim that MCC directors, including the Taube brothers, breached their fiduciary duty in approving the merger. In April, MCC and FrontFour reached a settlement in which MCC agreed to amend its transactions to include a go-shop process. Now, Highland is seeking to appoint two directors to the board and oust Seth Taube and Arthur Ainsberg, arguing that the continued presence of five of the original board members jeopardizes shareholder interests. Institutional Shareholder Services and Glass Lewis recommended that investors vote for Highland's directors.

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5/24/2019

Navient Elects First Female Board Chair

Philadelphia Business Journal (05/24/19)

Within weeks of avoiding a proxy battle with its biggest stockholder, student loan servicer Navient Corp. (NAVI) has named management consultant Linda Mills as chair of its board, effective June 6. Mills will replace Chairman William M. Diefenderfer III, who decided not to stand for re-election. She joined the board in 2014 and is president of Cadore Group, a management and technology consulting firm. Mills also serves on the board of directors of American International Group Inc. (AIG), the Smithsonian National Air and Space Museum, and the board of visitors for the University of Illinois College of Engineering. Following engagement by shareholder Canyon Partners over the company's slate of director nominees, Navient earlier in May agreed to add two new board members. Canyon has a 10.5% stake in Navient. Both former investment banker Marjorie Bowen and fintech investor and former banking executive Larry Klane will be nominated by Navient for election at the company's June 6 annual meeting. In return, Canyon agreed to withdraw its nominees and vote for Navient's choices. The two sides had been battling publicly since Navient spurned Canyon's $3.2 billion takeover bid, arguing the $12.50 per share offer "substantially undervalues" the company. Canyon withdrew its bid a few days later and proposed a minority slate of independent board candidates "to bring a fresh perspective and oversight to Navient's strategic direction, about which Canyon has significant concerns." Canyon had argued that Navient used a "material portion" of its cash flow to invest in new businesses and ventures, such as loan origination, that it thinks is ill-advised. It also said management has not done enough to halt its waning performance and is also the subject of several lawsuits brought by federal regulators and state attorneys general that are over the company's equity value.

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5/23/2019

SEC Adds Proxy Advisors, Shareholder Proposal Thresholds to Regulatory Agenda

Pensions & Investments (05/23/19) Bradford, Hazel

The Securities and Exchange Commission (SEC) is weighing updating rules on the use of proxy advisory firms and thresholds for shareholder proposals, according to its new semiannual regulatory agenda. No additional details were offered in the agenda, which forecast an April 2020 release date for advanced notice of proposed rule-making on the two issues. SEC Chairman Jay Clayton has publicly backed reviewing rules on the proxy process and proxy advisory firms and updating the ownership thresholds for shareholder proposals. More transparency about how proxy advisory firms develop reports and reveal conflicts of interest has been advocated by Congress and business interest groups. The current shareholder proposal rule, which permits shareholders with a minimum of $2,000 of company stock or 1% of eligible voting shares for at least one year to offer proposals, is backed by the Council of Institutional Investors, according to deputy director Amy Borrus. "For decades, shareholder proposals have been a key tool for retail and institutional investors to communicate with other shareholders and company directors and executives on important issues affecting public companies," she said in an email. "Many companies have voluntarily adopted corporate governance best practices contained in CII's policies in response to shareholder proposals. There is little evidence that the current volume of shareholder proposal—which constitute around 2% of the voting items at company annual meetings—puts a significant burden on companies."

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5/23/2019

Legg Mason Cuts 12% of Staff in Revamp as Peltz Joins Board

Bloomberg (05/23/19) Gittelsohn, John

Legg Mason (LM) announced it is reducing its personnel by about 12% and consolidating its executive committee from eight to four members just days after the addition of Trian Fund Management's Nelson Peltz to its board. Legg Mason CEO Joseph Sullivan called the reductions "critical to our ongoing growth" in a staff memo. Company spokeswoman Mary Athridge said nearly 100 staff cuts will be concentrated in the United States, with the rest in European and Asian branches. Peltz and two more Trian reps will join Legg Mason's board after the hedge fund acquired a 4.5% stake. Peltz cited three overriding priorities, including "significantly reducing costs, driving revenue growth organically and through acquisition, and increasing profitability." Shares in Legg Mason fell 0.6% to $36.90 Thursday in New York, prior to the staff cut announcement. Those shares have appreciated almost 45% this year, after a 37% loss last year.

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5/23/2019

D.E. Shaw's Koffey Leaves Hedge Fund

Reuters (05/23/19) Herbst-Bayliss, Svea

D.E. Shaw & Co. manager Quentin Koffey has departed the hedge fund to join Senator Investment Group. This is a blow to D.E. Shaw, which is striving to emulate Koffey's previous employer, Elliott Management Corp., as a generalist hedge fund with activist leanings, pushing for major changes at companies. "We do not expect any material changes to our activist positions due to Quentin's departure," said D.E. Shaw spokesperson Randall Whitestone. D.E. Shaw gained a larger presence in shareholder activism under Koffey, who persuaded Lowe's Cos. (LOW) and Bunge Ltd. (BG) to restructure their boards. Senator is smaller than D.E. Shaw, with holdings of about $7.7 billion, and sources said the fund has been looking for someone to increase its shareholder activism. "As the pace of change in business accelerates, there is a compelling opportunity for us to work collaboratively with management teams to help them strengthen their businesses and create value for shareholders," noted Senator founders Alexander Klabin and Douglas Silverman.

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5/23/2019

Alton Towers Owner Merlin Urged by US Investor to Go Private

The Guardian (05/23/19) Sweney, Mark

ValueAct Capital penned a letter on May 23 urging Merlin Entertainments (MERLY), which operates 130 attractions and amusement parks worldwide, to go private. ValueAct, which is Merlin's second-largest shareholder with a 9.3% stake, says that the company was too quick to go public and argues that private ownership would raise share prices, align employee incentives, and support the investments that it believes Merlin must make. Merlin's board responded to the letter by saying that while it would continue "constructive dialogue" with ValueAct, it plans to continue to pursue its current strategy.

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5/23/2019

EQT Files Definitive Proxy and Mails Letter to Shareholders

Business Wire (05/23/19)

EQT Corp. (EQT) has filed its definitive proxy statement with the Securities and Exchange Commission in connection with the company's 2019 annual meeting, scheduled for July 10, 2019. The EQT board is calling for shareholders to vote for its director nominees. The independent directors of EQT also mailed a letter to shareholders. It says, among other things, that the board has carefully considered the Toby Rice slate and determined the EQT nominees are better suited to continue to oversee EQT's transformation. "The Board believes that the Rices' campaign is designed to install Toby as CEO and his family and friends on the Board and management team. The Board should not be a friends-and-family club," the letter says. "The Board believes that the Toby Rice plan is fundamentally flawed and unrealistic, would be destabilizing and value destructive, and is solely designed to advance the interests of the Rice family and their friends, not EQT."

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5/23/2019

How a Sleepy Texas Trust Turned Into Permian Oil Proxy War

Houston Chronicle (05/23/19) Blum, Jordan

The Texas Pacific Land Trust's (TPL) holdings in the Permian Basin, the world's fastest-growing oil and gas basin, has boosted its value from $300 million in 2012 to nearly $7 billion today. Those holdings also have made Texas Pacific the focal point of what is arguably the fiercest shareholder battle in the energy sector. The Dallas-based trust's structure, dating back to the 1880s, features a board operated by only three trustees who serve lifetime appointments. One trustee died in March, and hedge fund investors have launched a proxy fight to choose the next trustee, with a stated goal of transforming the trust into a traditional corporation with a larger board and modern governance practices. However, Texas Pacific's leadership is concerned that converting to a corporation could lead to its sale and has argued that most shareholders have held the stock for generations and enjoyed steady dividend checks. The proxy fight is led by Horizon Kinetics, which owns more than 23% of the trust, and SoftVest, which holds a nearly 2% stake. Eric Oliver, the opposition trustee candidate who runs SoftVest LP, notes that "we're talking about 900,000 acres of arguably the lowest cost for barrel of oil in the world, so the stakes are much higher." The trustees filed suit against Oliver on May 21, accusing him and his allies of federal securities law violations for making false and misleading statements to investors, and delayed the June 6 shareholder vote indefinitely. Meanwhile, the opposition has accused the trustees of tampering with the integrity of the corporate voting system through multiple delays, and on May 22, they reportedly met and declared Oliver the new trustee. Meanwhile, Texas Pacific has nominated Donald Cook, a retired Air Force four-star general who has served on boards of major corporations like Burlington Northern Sante Fe railroad and the USAA Federal Savings Bank. Both Glass Lewis and Institutional Shareholders Services have concluded that Texas Pacific needs reform but believe Cook is the best choice because of his experience and his apparent willingness to push for change. Cook has agreed to stand for re-election in three years and advocate for quarterly investor calls and management meetings, among other things.

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5/23/2019

Canopy's Proposed U.S. Deal Is a Boon for the U.S. Cannabis Sector, Says This Investor

MarketWatch (05/23/19) Linnane, Ciara

Cresco Capital Partners LLC voiced support for Canopy Growth Corp.'s (CGC) plan to acquire Acreage Holdings Inc. (ACRGF) as soon as cannabis is legalized in the United States. The proposed $3.4 billion deal is the "most significant" as well as the biggest deal in the sector so far, and brings a much-needed infusion of capital to the cash-starved cannabis industry, Cresco managing partner Matt Hawkins wrote in a letter to investors. "As one of one of the best capitalized companies in the industry, Canopy Growth has introduced a creative structure to potentially gain a foothold in the United States, the most lucrative global cannabis market. From an Acreage perspective, it now has 58 million shares of Canopy Growth injected in the company to continue to make strategic acquisitions and expand across the country. In an industry where capital still costs a premium, this infusion is a tremendous differentiator," he said. Hawkins was responding to Marcato Capital Management, which owns a 2.7% stake in Acreage's subordinated voting shares and is the deal's biggest critic. Marcato argues that the deal substantially undervalues Acreage.

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5/23/2019

Nissan Board Nominees Not Broaching Merger Issue: Member

Reuters (05/23/19) Tajitsu, Naomi

On May 23, an external director of Nissan Motor Co. (NSANY) said that the company is not considering a merger with top shareholder Renault (RNLSY) at the moment. Last week, after accusing former CEO Carl Ghosn of financial misconduct, Nissan announced a list of 11 nominees for its expanded board of directors, which included both the CEO and the chairman of Renault; sources had previously informed Reuters that Renault was maneuvering for merger talks. However, Keiko Ihara, who has been overseeing recent efforts to overhaul corporate governance, said that a merger was not on the table at the moment, and she was not aware that any of the director nominees were looking to make it an issue now. She added that the provisional council believed there were "dozens of people" within Nissan who could eventually fill management positions.

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5/23/2019

HKEx Sets Guidance on Board Diversity

Fund Selector Asia (05/23/19) Wilson, Drew

The Hong Kong Stock Exchange (HKEx) has made changes to its rules "to require additional disclosures on policy of board diversity" to include gender. Moving forward, if a company is planning an IPO and has a board made up of one gender, managers will have to explain how and when gender diversity of the board will be improved. Managers will also have to detail "measurable objectives it has set for implementing gender diversity" and "measures the applicant has adopted to develop a pipeline of potential successors to the board that could ensure gender diversity of the board."

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5/22/2019

SRD II Requirements for Proxy Advisory Services

Lexology (05/22/19) Fountain, Karen

The U.K. Financial Conduct Authority on May 15 published the Proxy Advisors (Shareholders' Rights) Regulations 2019, implementing the article of the Shareholder Rights Directive (SRD II) dealing with proxy advisors. SRD II, which must be implemented by June 10, aims to promote effective stewardship and long-term investment decision-making by institutional investors in public companies by enhancing transparency of engagement policies and investment strategies across the institutional investment community. Under the new regulations, proxy advisors are required to disclose the code of conduct which they apply, or explain why they do not apply a code of conduct; disclose information on their research capabilities and how they produce their advice and voting recommendations; and identify and disclose any actual or potential conflicts of interests or business relationships that may influence the preparation of their research.

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5/22/2019

Texas Pacific Investors Say Nominee Elected Trustee at Disputed Meeting

Reuters (05/22/19) Roy, Debroop; Singh, Kanishka

Texas Pacific Land Trust (TPL), one of the biggest landowners in Texas, says that an investor group on May 22 installed a trustee at a meeting which the company rejects as invalid. The company on May 21 had postponed a shareholder meeting to fill a vacant trustee spot after it filed a lawsuit against Eric Oliver, president of SoftVest LP. When the group held the meeting anyway, the company accused the group of misleading investors by "making materially misleading statements and failing to disclose material information." The investor group, which consists of hedge fund SoftVest LP, Horizon Kinetics LLC, and ART-FGT Family Partners, represents a 25% stake in the company. It wants to convert the trust to a Delaware corporation subject to modern governance principles, increase transparency, sell off the firm's portfolio, and engage shale-extraction opportunities in the Permian basin.

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5/22/2019

Big Super Fails to Back Shareholder Resolutions

Australian Financial Review (05/22/19) Mather, Joanna

The majority of large superannuation funds in Australia failed to support shareholder resolutions on environmental, social, and governance (ESG) issues last year. According to Daniel Gocher, climate and environment director at the Australasian Centre for Corporate Responsibility (ACCR), the exceptions were construction industry fund Cbus, Local Government Super and Vision Super, which voted in favor of shareholder resolutions on more than 75% of occasions. "Despite claims from many funds that they are 'ESG aware,' there is still widespread reluctance to support sensible shareholder proposals on these issues," Gocher said. ACCR's analysis of the publicly available voting records of 50 super funds on 260 shareholder proposals relating to ESG issues across six jurisdictions in 2018 revealed that only 17 resolutions occurred in Australia, with 176 in the United States. Gocher added, "Sadly, despite growing investor concern about climate change, just eight funds supported a majority of climate-related proposals in 2018. Most of these proposals relate to the disclosure of climate risk and setting targets for reducing emissions. Funds are running out of valid excuses for not supporting proposals of this nature, particularly when groups like the Investor Group on Climate Change are making similar demands of companies."

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5/21/2019

Telecom Italia Chief Favors Network Control in Any Open Fiber Tie-Up

Reuters (05/21/19) Pollina, Elvira; Jewkes, Stephen

On May 21, Telecom Italia (TIM) CEO Luigi Gubitosi said that in the case of a merger with smaller infrastructure provider Open Fiber, TIM should seek to retain control of its fixed-line network. The chief executive said that "some control" would be best for the company, adding that issues including valuations had yet to be discussed with shareholders and the board, with whom the possibility of a merger has been contentious—Elliott, which has a stake in TIM, has called for a spin-off of its fixed-line network while looking to keep between 25% and 75% of the asset, while Vivendi, which controls 23.9% of TIM, opposes losing control of the network. Open Fiber is owned in part by state lender CDP, which recently built a stake of 10% in TIM and became its second-largest shareholder. Italy has been pushing for the merger to avoid duplicate investments and create a single ultrafast broadband operator. According to Gubitosi, a complete assessment of the merger will be finished and evaluated by two company board meetings on June 27 and Aug. 1.

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5/21/2019

Icahn-Backed Oil Refiner CVR Energy Considers Options

Bloomberg (05/21/19) Casey, Simon; Carroll, Joe

Seven years after Carl Icahn took control of CVR Energy Inc. (CVI), the Sugar Land, Texas-based oil refiner is considering strategic options, including putting itself up for sale. It said on May 21 that it has retained Bank of America Merrill Lynch as a financial adviser. CVR also forged a deal to sell its 1.5 million-barrel storage terminal and related assets in north-central Oklahoma to Plains All American Pipeline LP (PAA) for about $36 million. In a note to clients, analysts at Tudor, Pickering, Holt & Co. said the company "is already trading at a hefty price. We struggle to see who the likely buyer would be." According to data compiled by Bloomberg, Icahn Associates Holding owned 71% of CVR as of April 10. CVR said in a statement that it "does not have a defined timeline for the exploration of strategic alternatives and makes no assurances that its evaluation will result in any transaction being announced or consummated."

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5/21/2019

Coming This Summer: SEC Roundtable on the Impact of Short-Termism

Cooley PubCo (05/21/19) Posner, Cydney

Securities and Exchange Commission Chairman Jay Clayton said the agency will hold a roundtable this summer to discuss "the impact of short-termism on our capital markets and whether our reporting system, or other aspects of our regulations, should be modified to address these concerns." He indicated that the roundtable "will seek to explore the causes of short-termism and to facilitate conversations on what market-based initiatives and regulatory changes could foster a longer-term performance perspective in American companies." The goal of the roundtable is not only to discuss the problems associated with short-termism but also to promote "further dialogue on the causes of and potential solutions to the issue," Clayton said.

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5/21/2019

Investor Adviser Gives 'Final Warning' Over Promoting Senior Women

Financial Times (05/21/19) Storbeck, Olaf; Walker, Owen

Hermes EOS has given German companies a "final warning" to have at least three women out of every 10 top executives within five years, promising to vote against any supervisory boards that fall short. To comply with the London-based investor adviser's call, German companies would have to more than triple, on average, the share of female management board members. Its new corporate governance principles for Germany encourage companies "to set out plans to reach the 30% target within a reasonable timeframe," which is usually between three to five years, according to Hermes EOS executive director Hans-Christoph Hirt. According to data from EY, the share of female senior executives at Germany's 160 largest companies rose from 7.3% last year to 8.6%. While the number of female directors increased by 11 to 61 in 2018, the number of men in top positions increased by 12 to 650. Just 8% of companies have more than one woman on the executive board, and two-thirds have no female board members. Since 2015, listed German companies have been required by law to raise the share of female supervisory board members to at least 30%. Given that men and women each account for 50% of the workforce, Hirt says, "If you exclude half of the workforce from your board, you ignore a large part of the talent pool."

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5/21/2019

Voce Issues Statement Regarding Argo Proxy Contest

Business Wire (05/21/19)

Voce Capital Management, with approximately a 5.6% stake in Argo Group International Holdings Ltd. (ARGO), has issued a statement to its fellow shareholders in connection with the company's upcoming 2019 annual meeting of shareholders. Voce says that earlier this year it sought and obtained regulatory approval for its proxy solicitation at Argo from all relevant state Departments of Insurance. But "we have recently been advised by two states that they have now flip-flopped, at the 11th hour, revoking their prior approvals and casting doubt on our ability to proceed," Voce says in the statement. Virginia became the second state to do so, in a letter dated May 20. "Argo's active role in lobbying the various DOI is clear and irrefutable. We believe that the officials reversed their previously well-founded positions as a result of Argo's misinformation. In fact, Virginia explicitly stated in its letter to us that it had 'considered additional materials and information provided by Argo' in rescinding its previous approval." Voce goes on to say that "the Illinois DOI has threatened to 'pursue injunctive relief and/or to seek the voiding of any proxy votes cast,' should our contest proceed." Therefore, Voce has decided to withdraw its nominations for election of directors at the annual meeting. Voce says it is weighing its legal remedies.

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5/21/2019

FirstEnergy Shareholders Approve 7 Measures at Annual Meeting

Akron Beacon Journal (OH) (05/21/19) Mackinnon, Jim

At FirstEnergy's (FE) annual meeting on May 21, shareholders voted in 11 directors to the board, approved measures to reduce voting requirements from a supermajority threshold to majority on two issues, and approved other management proposals. John Chevvedon persuaded enough of his fellow shareholders to pass a non-binding proposal calling for majority, not supermajority, votes on significant company issues at shareholder meetings. The board recommended against approval, noting that the company is not bound to implement the proposal, and said it was similar to a binding company proposal that also passed. FirstEnergy President and CEO Chuck Jones also discussed the company's 2018 achievements, noting, among other things, that the board approved a new dividend policy to support expected increases in shareholder returns.

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5/21/2019

Shareholders May Engage Pot Stocks Next

BNN Bloomberg (05/21/19) Owram, Kristine

Observers say Marcato Capital Management's opposition to Canopy Growth Corp.'s (CGC) acquisition of Acreage Holdings Inc. (ACRGF), in which it is a shareholder, may signal a new trend in which investors engage companies in the cannabis industry. Marcato said it will vote against the deal because it undervalues Acreage, and given its belief that the value of pot firms will soar with U.S. legalization, "it is highly imprudent for Acreage to sell itself today at the proposed valuation, with so much unlocked growth and value embedded in the company." Bloomberg Intelligence analysts Kenneth Shea and Gopal Srinivasan said it marks the first time an investor has waded into the cannabis industry, and its opposition "may be a precursor of rising shareholder ire [engaging] cannabis companies that are perceived to not be acting in the best interest of all shareholders." Elsewhere in the industry, Aurora Cannabis Inc. (ACB) recently hired Trian Fund Management's Nelson Peltz as a strategic advisor. Meanwhile, iAnthus Capital Holdings Inc. (ITHUF) CEO Hadley Ford said in a recent interview that "there absolutely will be" a rise in shareholder engagement.

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5/21/2019

Fortum Makes Progress in Talks to Resolve Uniper Standoff

Reuters (05/21/19) Steitz, Christoph; Schuetze, Arno

On May 21, Fortum (FOJCY) struck a deal with Elliott and Knight Vinke in an attempt to resolve a standoff over Uniper (UNPRF), of which it owns 49.99%. Progress was made in talks over cooperation with the German energy group after the funds stepped back from increasing pressure on the Finnish utility to seek full control. Sources say Elliott and Knight Vinke, which together hold about 23% of Uniper, have agreed to back Fortum's strategy in return for a commitment that the company will help to clear a key legal hurdle to a full Uniper takeover. The funds also will get an opportunity to sell their stakes, though it remains unclear whether Fortum, Uniper, or a third party would be able to offer to buy them. Last year, Russian regulators ruled that Fortum cannot own more than half of Uniper as long as its Russian business, Unipro, owns a local water-testing license.

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5/21/2019

PPG Won't Break Up, Despite Pressure From Investor

Wall Street Journal (05/21/19) Hufford, Austen; Maidenberg, Micah

PPG Industries Inc. (PPG) said on May 21 that despite pressure from Trian Fund Management LP to separate its units making building paints and industrial coatings, it will move ahead as a unified company. The Pittsburgh-based company cites separate reviews by Goldman Sachs Group Inc. (GS) and Morgan Stanley (MS) that found keeping the business intact would be the best strategy. CEO Michael McGarry said on a call with analysts, "There were zero opinions that we should do anything different than what we announced today." Trian owns a stake in PPG of about 2.5%. The firm has pared down its stake from 7 million shares in February to about 6 million in May, according to FactSet data.

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5/21/2019

Institutional Investors Calling on Companies to Do More Around Disability Inclusion

Benefits Canada (05/19)

A group of U.S. institutional investors representing over $1 trillion has released a statement calling on investee companies to better include people with disabilities in the workforce. The statement argues that disability inclusion creates sustainable value for portfolio companies and helps to maximize their long-term profitability. The statement recommends a number of best practices for companies, including hiring goals, disability-focused support groups, and diversity statements that specifically mention people with disabilities. Signatories include Sheila Morgan-Johnson, executive director of the District of Columbia Retirement Board, Illinois state treasurer Michael Frerichs, and Thomas DiNapoli, trustee of the New York State Common Retirement Fund and the state's comptroller, among others.

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5/21/2019

Front Yard to Explore Alternatives

Seeking Alpha (05/21/19) Kiesche, Liz

Front Yard Residential (RESI) has reached an agreement to add two directors to its board and form a board committee to consider alternatives as part of an agreement with Snow Park Capital Partners. Front Yard will name Leland Abrams and Lazar Nikolic to the board and the committee, and David B. Reiner will retire from the board. The committee will consider alternatives such as the possible internalization of the asset management function, possible termination of the asset management agreement with Altisource Asset Management, and the possible sale of the company. Snow Park will withdraw from the proxy contest.

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5/21/2019

Kimmeridge Corrects Inaccuracies in PDC CEO's Letter to Shareholders

PRNewswire (05/21/19)

Kimmeridge Energy Management Co., with a 5.1% stake in PDC Energy Inc. (PDCE) responded today to PDC's claims regarding independence and conflicts of interest. Kimmeridege disputes a recent letter PDC CEO Bart Brookman sent to shareholders claiming that Ben Dell, Kimmeridge's leader, is "primarily focused on pushing PDC to engage in mergers with our competitors, including transactions in which he would be a financial participant." Kimmeridge says it does not own shares in publicly traded energy companies other than PDC. Further, "Ben Dell has no investments in private energy companies or publicly traded energy companies other than through Kimmeridge. Neither Kimmeridge nor Ben Dell stand to benefit from any potential M&A transaction in a manner that differs from other PDC shareholders." Ben Dell's interests are "directly aligned with those of all shareholders, due to the 5.1% stake held by [Kimmeridge]," ISS recently concluded.

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5/21/2019

Podcast: Preventing Activist Engagement This Proxy Season

IR Magazine (05/21/19) Cossette, Jeff

Shareholder activism has surged since the beginning of the financial crisis a decade ago. Although any underperforming company is vulnerable, a recent report indicates that consumer discretionary, financial, and telecommunications companies are especially likely to be engaged. On this podcast, host Jeff Cossette talks with proxy solicitor Bruce Goldfarb, founder and chief executive of Okapi Partners. Goldfarb says companies with robust shareholder communications and strong ESG policies are better positioned to deter or fend off an activist's engagement.

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5/21/2019

For the First Time, Amazon Faces an Enormous Slate of Shareholder Proposals

CNN (05/21/19) DePillis, Lydia

Amazon (AMZN) received more shareholder resolutions than any other company this year, according to an Alliance Advisors study. Although a few were either withdrawn by their proponents or excluded with the permission of the Securities and Exchange Commission, shareholders still voted May 21 on a dozen measures at Amazon's annual general meeting—issues ranging from hate speech to food waste to Amazon's facial recognition technology. Nine of the resolutions were coordinated by the Interfaith Center on Corporate Responsibility, a coalition of about 300 institutional investors that urge their portfolio companies to take action on human rights, gender and racial diversity, and the environment. The group opted to zero in on Amazon after finding that many members had been frustrated over the years in attempting to engage the company through less confrontational means.

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5/21/2019

Mack-Cali Board Ends Settlements Talks With Investor Bow Street

The Real Deal (05/21/19)

Real estate investment trust Mack-Cali (CLI) has terminated settlement talks with investor Bow Street. Mack-Cali accused Bow Street, which owns 4.5% of the company, of a "conflict of interest" in starting a proxy fight last month, when it sought to elect four candidates to the trust's board of directors. The settlement would have had Mack-Cali set up a committee of four independent directors charged with evaluating a number of options to maximize shareholder value, including the divestiture of certain assets and the potential sale of the company. Mack-Cali has enlisted law firms Greenberg Traurig and Seyforth Shaw to advise on the conflict.

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5/21/2019

Texas Land Bank Proxy Fight Turns Ugly as Dissident Nominee Sued

Bloomberg (05/21/19) Mutua, David Caleb; Deveau, Scott

Texas Pacific Land Trust (TPL) has postponed a special shareholders meeting scheduled for June 6 until further notice to give investors "the opportunity to cast a fully informed vote" over a vacant trustee seat. It also filed a lawsuit in federal court in Dallas accusing dissident nominee, SoftVest LP's Eric Oliver, of violating securities laws in connection with the proxy contest and secretly working in concert with other parties, including Santa Monica Partners and Universal Guaranty Life Insurance Co. The claims in the lawsuit are without merit, according to Oliver, and the other parties did not need to register as part of the dissident group. In an interview, Oliver said, "I would say if they had the votes they needed, they would be holding the meeting." He added that based on preliminary counts, the group has sufficient votes to win the trustee seat. Meanwhile, Santa Monica President Lawrence J. Goldstein said the firm supports Oliver but is not working with the dissident shareholders. Despite the backing of Institutional Shareholder Services Inc. and Glass Lewis & Co., the trust faces a challenge in garnering the necessary support for its own trustee candidate, given that the dissident investors hold more than 25% of the outstanding shares in the company.

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5/21/2019

ValueAct Founder Joins Board of Agritech Start-Up AppHarvest

Financial Times (05/21/19) Fortado, Lindsay

ValueAct founder Jeff Ubben has joined the board of AppHarvest as he seeks out investments in companies focused on the future of food. The agricultural technology start-up is building a 60-acre greenhouse in Kentucky, where it will use water-efficient, pesticide-free methods to grow tomatoes and cucumbers for distribution to grocers nationwide in an effort to reduce reliance on imports and long-distance travel for produce. On May 21, ValueAct's Spring Fund led AppHarvest's Series A fundraising, investing $2 million to be used for working capital. Ubben said the concept is "among the breakout ideas that is needed today. It envisions a fundamental change in how America farms. Its goal is to establish Appalachia as a hub for AgTech technology and expertise also has far-reaching positive implications for jobs and education in the region and beyond." Since turning over ValueAct's main fund to Mason Morfit, chief investment officer, in 2017, Ubben has focused on impact investing by creating the firm's Spring Fund.

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5/21/2019

Sony CEO Stresses Value of Sony Pictures Entertainment at Strategy Briefing

Variety (05/21/19) Schilling, Mark

At a May 21 media briefing, Sony Corp. (SNE) CEO Kenichiro Yoshida stressed the importance of Sony Pictures Entertainment to the conglomerate's strategy going forward, particularly given the global boom in subscription streaming services. The comments come amid consolidation in the industry and potential pressure from Daniel Loeb's Third Point, which recently increased its holdings in Sony by $63 million. In 2013, Loeb publicly pushed for the company to unload part of its entertainment businesses to boost shareholder value, but the proposal was rejected. Observers say it is possible that Loeb will renew his call for the company to sell off Sony Pictures Entertainment.

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5/20/2019

Blackstone, Whiting, Callon Consider Bids for Shale Driller QEP

Bloomberg (05/20/19) Porter, Kiel; Deveau, Scott

Sources say QEP Resources Inc. (QEP) has attracted takeover interest from private equity giant Blackstone Group LP (BX) and drillers Whiting Petroleum Corp. (WLL) and Callon Petroleum Co. (CPE). In February, the Denver-based natural gas and oil explorer and producer said it would explore a sale after Elliott Management Corp.—which owns about 5% of QEP—made a $2 billion proposal to acquire the company. The sources say Elliott remains in the bidding for the company, and the process could wind up as soon as next month, though a final decision has not been made. Elliott said in January that it supported QEP's plan to focus on the Permian Basin in Texas and New Mexico and sell other assets, and indicated that the company was still "deeply undervalued."

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5/20/2019

Fare Value

Reuters Breakingviews (05/20/19) Kwok, Karen

Observers say FirstGroup (FGROF) CEO Matthew Gregory should listen to concerns from investors. Coast Capital Management, the bus and rail operator's biggest shareholder, says the company—which currently is worth 2.4 billion pounds, including 1.1 billion pounds of net debt—could be worth 5.2 billion pounds after separating its U.S. and U.K. businesses. However, FirstGroup's loss-making rail franchises are ascribed zero or negative value, and the company has a 273 million pound pension deficit, most of which is attached to the U.K. business. According to RBC estimates, FirstGroup could still be worth 2.6 billion pounds, even factoring in a solution to the pension issue. Meanwhile, Coast Capital has criticized the company's board, particularly that most board members come from other industries, like airlines and supermarket chains. The firm wants to replace six of the 11 board members.

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5/20/2019

Campbell Asks International Division Bidders to Reconfirm Offers

Philadelphia Business Journal (05/20/19) Hilario, Kenneth

Campbell Soup (CPB) has reportedly asked Mondelez International (MDLZ) and private equity firm KKR (KKR) to reconfirm their bids for its international division. However, the companies have not offered more than $3 billion for the international cookie brands, which is Campbell's asking price, according to the Australian Financial Review. Investor Dan Loeb and hedge fund Third Point have been engaging Campbell. Mondelez and KKR are interesting in buying the international division, which includes Arnott's and Kelsen Group, for $2.5 billion. Mondelez was identified as the lone bidder. In April, Campbell sold its fresh foods division for $510 million to an affiliate of Butterfly Equity. Last August, the company announced a plan to sell its international and fresh divisions and use the proceeds to reduce debt. In December, Campbell announced Mark Clouse as the company's new CEO.

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5/20/2019

'Poorly Managed' Cenkos Pressured to Acquire Rival Broker

Financial News (05/20/19) Chopra, Shruti

Crystal Amber says Cenkos Securities is a "poorly managed business" and should merge with a competitor. Cenkos suffered a 25% decline in full-year revenues in 2018, compared with 2017, as new regulations such as MiFID II and Brexit pressure the industry. Crystal Amber investment adviser Richard Bernstein says London's broking sector is overcrowded. "We want Cenkos to lead consolidation," Bernstein says. "You don't need four firms doing very similar things with four compliance departments and four rents on the City of London, you need one firm." Further, "We've been having dialogue for well over a year and they [Cenkos] are not responding. We think it's a poorly managed business. They need proper management, they need some leaders who understand business." Crystal Amber also is concerned about frequent top-management turnover. Cenkos last week said its plan to rehire former boss Jim Durkin as chief executive has been put on hold due to his failure to be approved by the Financial Conduct Authority. "How did the board decide that Jim is the best candidate in the country? It was a bit like, 'We know him and he knows us, so let's choose him," Bernstein says. " ... Jim is a good equity salesman and a decent man, but he's not a business leader."

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5/20/2019

Deja Vu at Sony With Investor Loeb Back in the Picture

Nikkei Asian Review (05/20/19) Nagumo, Jada

Sony (SNE) on May 21 will discuss the company's management strategy for the next two years. President Kenichiro Yoshida is set to face investors a week after Daniel Loeb's Third Point revealed that it had acquired about $63 million of Sony's American Depository Receipts during the three months through March 2019. In 2013, Loeb engaged Sony on partially spinning off its entertainment division, but the company rejected the idea while agreeing to other concessions. The movie production business is still not generating enough profit, but it is unlikely that Sony, which has recently created synergies among its movie, hardware, and gaming businesses, will want to sell the movie division. Yoshida will need to convince investors that movies are essential to improving Sony's value. Meanwhile, longtime shareholder Oasis Management remains upbeat about the company's prospects. "We agree with management and other shareholders that the public markets do not appreciate the full value of the world class content assets, in addition to the significant increase in earnings and operating margins under Yoshida's leadership as CFO and now CEO," says Oasis Chief Investment Officer Seth Fischer.

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5/20/2019

Foreign Fund 'Not Satisfied' After Kyushu Railway Refuses Proposals

Nikkei Asian Review (05/20/19) Nagumo, Jada

Fir Tree Partners held a media briefing in Tokyo on Monday to discuss its efforts to engage Kyushu Railway. The event came a week after Kyushu Railway announced that it was rejecting all six of the New York hedge fund's shareholder proposals. In March, Fir Tree revealed that it had increased its stake in Kyushu Railway to 6.1% and planned to submit a shareholder proposal for its annual general meeting in June. The investment firm's proposals include a share buyback, election of directors, and structural changes to the board. Addressing its reasoning for opposition in its midterm business plan, Kyushu Railway cited the rapidly changing business environment, and the need for capital to maintain strong performance in its core business as well as investment in growth areas. But Fir Tree managing director Aaron Stern said the hedge fund was not satisfied with Kyushu Railway's explanation. "We stick to our proposals and will continue our dialogue with the company," he said. Stern declined to comment on whether a proxy fight or a further increase in its stake are part of Fir Tree's plans. Foreign investors held more than 38% of Kyushu Railway's shares as of last September.

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5/20/2019

Mack-Cali Alleges Conflict of Interest in Investor's 'Clarifications'

Seeking Alpha (05/20/19) Kiesche, Liz

Mack-Cali (CLI) argues that Bow Street has attempted to take control of a proposed strategic review committee. Under one of Bow Street's clarifications of Mack-Cali's draft settlement proposal, the investor would be actively involved in the committee's work, including engaging potential bidders "to the extent Bow Street deems necessary." Mack-Cali sees this as a conflict of interest, because Bow Street has submitted its own proposal to acquire certain Mack-Cali assets.

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5/20/2019

Coast Capital Refiles FirstGroup Requisition Meeting After Error

Morningstar.com (05/20/19) Collard, George

FirstGroup PLC on May 20 said a shareholder has refiled its requisition notice after an administrative error. Hermes-Golden Ltd., managed by investor Coast Capital Management LP, a week ago called a meeting in an effort to remove six of the current 11 directors of FirstGroup and appoint seven it selects. Coast Capital has a 9.8% stake in the transport company. FirstGroup on May 20 said the original notice was invalid, because it was signed by the wrong holder of Coast Capital's stake.

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5/20/2019

Fortum Must Shoot Down Investor Proposals for Uniper—Union

Reuters (05/20/19) Kaeckenhoff, Tom; Virki, Tarmo; Steitz, Christoph

Uniper's (UNPRF) top investor, Finland's Fortum (FOJCY), must show its cards before the German energy company's May 22 annual meeting and shoot down proposals from investors, some of which could trigger the company's breakup, according to Andreas Scheidt, a member of the national executive board of German union Verdi. Uniper's fate has been hanging in the balance since Fortum acquired a 49.99% stake against Uniper's will and has been prohibited from owning more unless Uniper sells a water-testing license in Russia. Uniper's No. 2 shareholder, Elliott, has proposed a motion that would prompt management to enter talks with Fortum over a so-called domination agreement in an effort to break the deadlock. Meanwhile, No. 3 shareholder Knight Vinke has proposed spinning off Uniper's Russian unit, Unipro, by splitting off the International Power business or considering a legal separation of its hydroelectric and nuclear power generation assets in Sweden. Uniper has rejected Knight Vinke's proposals, and, regarding Elliott's, said it would have far-reaching implications for Fortum without being more specific.

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5/20/2019

Keith Meister's Corvex Reaps Gains From Revamped Portfolio

Institutional Investor (05/20/19) Taub, Stephen

Keith Meister's Corvex Management already is up more than 20% through April, according to a source. Over the past four years, the firm's main fund lost money in one year and posted low- to mid-single-digit gains in the other three. This year's surge follows a major portfolio shakeup in the first quarter, during which nine of its 14 biggest U.S. long common stock positions were established. Several of the new positions have fueled Corvex's gains so far this year, including Adobe Systems (ADBE), up nearly 28% during the first four months of the year; Amazon (AMZN), up slightly more than 25% over the same period; Disney (DIS), up close to 28%; and Guidewire Software (GWRE), up almost 33%. Corvex's biggest positions are MGM Resorts International (MGM), which accounts for about one-third of its total U.S. equity loan portfolio, and Diamondback Energy (FANG), which accounts for 22% of its U.S. stock portfolio excluding options.

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5/20/2019

PDC Energy President & CEO Bart Brookman Mails Letter to Shareholders

Yahoo! Finance (05/20/19)

PDC Energy Inc. (PDCE) on May 20 mailed a letter from President and CEO Bart Brookman to shareholders regarding the company's May 29 annual meeting. "I share with you my deep concerns regarding Kimmeridge Energy's efforts to elect three individuals to PDC's Board, in opposition to the company's slate of directors," he wrote. "Many of Kimmeridge's proposals would destroy economic value over time, negatively impact PDC employees, impair our safety programs, and threaten the longstanding rapport we have established with regulatory bodies, communities, and landowners. Kimmeridge's short-sighted ideas would be a dramatic step in the wrong direction and would be dangerous for PDC and the communities in which we live and work. Lastly, Kimmeridge's board candidates have no significant public board experience, no depth of knowledge in large-scale operational matters, and no familiarity with the Colorado regulatory environment...For these reasons, I strongly encourage you to protect the value of your investment, and vote the WHITE proxy card FOR all three of your board's highly qualified nominees today."

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5/20/2019

Legg Mason Appoints Nelson Peltz and Ed Garden of Trian Partners to Board of Directors

PRNewswire (05/20/19)

Legg Mason Inc. (LM) on Monday confirmed it reached an agreement with Trian Fund Management LP on the composition of its board, naming Nelson Peltz and Ed Garden as directors. In addition, Legg Mason said Trian will identify a third independent director candidate who, after board approval, will be included as a Legg Mason nominee. Trian owns a roughly 4.5% ownership interest in the Baltimore-based money manager. Legg Mason has also pledged to nominate at least two more independent candidates to its board.

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5/20/2019

Elliott Management Opposes Airline Azul on Avianca Brasil Bankruptcy Plan

Reuters (05/20/19) Rochabrun, Marcelo

Brazilian airline Azul SA plans to purchase some of the routes operated by financially troubled rival Avianca Brasil for $145 million, according to legal documents. However, Elliott Management, which is known in Latin America for forcing Argentina into bigger repayments on defaulted bonds, is Avianca Brasil's largest creditor by a wide margin and is opposing Azul's plan. Avianca Brasil filed for bankruptcy protection in December, setting off a dispute for its routes among Brazil's top airlines. Elliott has used its dominance as a creditor to influence the dispute over the routes. Legal documents show that Elliott crafted the current bankruptcy reorganization plan, which Azul has countered with its own new proposal this month. The final verdict is in the hands of a judge, but the hedge fund is asking the court to dismiss Azul's proposal and keep its own plan intact, which would benefit Azul's two larger Brazilian rivals: Gol Linhas Aereas Inteligentes SA and LATAM Airlines Group.

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5/19/2019

Voce Capital Takes Aim at Insurer Argo

Financial Times (05/19/19) Ralph, Oliver

Voce Capital will attempt an ouster of Argo Group's (ARGO) chairman, Gary Woods, and four other directors at the company's May 24 annual meeting. Voce—which owns 5.6% of Argo, making it the fourth largest shareholder—wants to replace the five board members with its own candidates. In a recent presentation, the investor said, "While Voce is not seeking 'control' of Argo in any sense, we include a few 'starter kit' recommendations for the new board to consider in its early days." ISS has backed Argo's management, while Glass Lewis has backed Voce, but not completely. According to Glass Lewis, "We believe it would be in the interests of shareholders to appoint new directors who could be reasonably expected to focus on expense management and board oversight concerns." It recommended removing only two of Argo's directors, including Woods, rather than the five that Voce wants to replace. Among other things, Voce has proposed cutting costs, releasing reserves, and selling businesses to improve Argo's return on equity from the long-term average of 5.7% to as much as 13.5%.

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5/19/2019

U.S. Investor Urges First Group to Split and Pull Out of 'Destructive' U.K. Rail Network

City A.M. (05/19/19) Rogers, Alexandra

Coast Capital is putting pressure on First Group (FGROF) to pull out of Britain's railways, split its U.K. and U.S. assets, and overhaul its board. According to the top 10 shareholder, First Group's U.S. assets have a "much higher independent valuation" than its U.K. assets and should be separated to generate £3 billion in capital that could be used for reinvestment, debt reduction, and pension top-ups. The U.S. investment management firm also held a general meeting in an effort to take control of First Group's board, calling for six of the 11 current directors to be replaced with seven of its nominees. Coast Capital founding partner James Rasteh said the existing leadership has "a track record of value destruction and underperformance."

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5/17/2019

ISS Backs Investor Kimmeridge's Two Nominees to PDC Board

Reuters (05/17/19) Pathikkal, Nishara Karuvalli

On May 17, Kimmeridge Energy Management Co. said ISS recommended two of its board nominees for PDC Energy Inc. (PDCE). The news came a day after Glass Lewis backed the company's full slate of directors. Kimmeridge—which owns 5.1% of PDC and is the oil and gas producer's seventh largest shareholder—nominated three directors to the board, with ISS recommending Kimmeridge founder Benjamin Dell and James Adelson. However, Kimmeridge said ISS expressed concerns about the potential impact of removing CEO Bart Brookman from the board at the company's May 29 annual meeting. PDC has been under pressure from shareholders, along with others in the industry, for higher expenses and lower returns.

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5/17/2019

Mal Durkee Joins Opus Bank as Elliott's Director Designee

Business Wire (05/17/19)

Elliott Management Corp., which manages funds that collectively own 14.1% of the fully diluted common stock of Opus Bank (OPB), has appointed G Malpass "Mal" Durkee to be its director designee on the Opus Bank board. Durkee has spent his career in the banking industry advising and executing on strategies to maximize shareholder value through strategic initiatives, mergers and acquisitions, and capital strategies. Over the last three decades, Durkee ran the bank practices at Morgan Stanley (MS), Merrill Lynch, and Perella Weinberg. In addition, he has advised the Federal Deposit Insurance Corp. and the U.S. Treasury Department on various matters. In a statement, Elliott commented, "Opus Bank is now very well positioned, having made significant progress across multiple fronts. The bank now has a refreshed and high-quality board, with a new CEO who brings a demonstrated record of creating shareholder value through operational and strategic initiatives. In this context, we believe Mal Durkee will be a highly valuable addition to the board. Elliott remains an engaged and active shareholder, and we will continue to directly communicate our views on value creation to Opus's board and management."

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5/17/2019

Bill Ackman's Pershing Square 1st Quarter Letter to Shareholders

GuruFocus.com (05/17/19)

Pershing Square Holdings generated strong performance during the first quarter of 2019 and year-to -date, according to the first quarter letter to shareholders. NAV per share increased 36.9% during the first quarter and by 38.4% year-to-date, compared with the S&P 500's year-to-date total return of 13.9%. Pershing Square's portfolio companies have generated substantial positive performance in line with their continued business progress. Chipotle's (CMG) first quarter results continued to demonstrate the significant progress that CEO Brian Niccol and his team have made in dramatically improving performance and positioning the company for long-term sustainable growth. Same-store sales grew 10% in the quarter led by transaction growth of approximately 6%, a significant acceleration in sequential growth. Automatic Data Processing Inc.'s fiscal third quarter earnings results continue to highlight the significant opportunity for accelerated revenue growth and improved prospective profitability, and its bookings growth jumped to 10%, a significant acceleration from previous periods. Restaurant Brands International's (QSR) most recent earnings results continue to reinforce Pershing Square's thesis that the company's royalty-based, franchise model is a uniquely valuable business with a large, long-term, capital-light, unit-growth opportunity. This quarter, QSR's unit count expanded by more than 5% while organic EBITDA grew 6% (excluding a 1% headwind from the timing of franchisee ad fund expenditures that temporarily exceeded contributions). Each of QSR's three brands generated positive organic EBITDA growth with Burger King's EBITDA up 10%.

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5/17/2019

Turmoil at Thyssenkrupp Marks Battle for Germany's Economic Identity

Reuters (05/17/19) Steitz, Christoph; Käckenhoff, Tom; Taylor, Edward

Thyssenkrupp (TKAMY) CEO Guido Kerkhoff's recently announced plans to list its prized elevators unit sparked a battle for the conglomerate's future that could test Germany's brand of "social market" capitalism. Investors are on one side, calling for a restructuring of the company to boost value, and its top shareholder, the Alfried Krupp von Bohlen and Halbach Foundation, with a 21% stake, and workers are on the other side seeking to protect the unity of the company and jobs. The deterioration of Thyssenkrupp's share price emphasizes how the conglomerate structure has fallen out of favor in the market, and many investors say Kerkhoff and the non-profit foundation must move to reshape the group's portfolio, including through spin-offs and divestments. Both Cevian, which holds an 18% stake, and Elliott, which holds less than 3%, have criticized Thyssenkrupp's underperformance.

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5/17/2019

EQT Corp. Proxy War With Rice Brothers Heats Up

Houston Chronicle (05/17/19) Blum, Jordan

Two years after EQT Corp. (EQT) acquired competitor Rice Energy for $6.7 billion, the independent natural gas powerhouse has become embroiled in an ongoing proxy war with the co-founder Rice brothers of Rice Energy, Toby and Derek Rice, who together own approximately 3% of EQT. Their brother, Daniel Rice, sits on the EQT board. After Toby Rice last week chose to end a lawsuit against EQT, he and Derek and some other former Rice executives decided to concentrate instead on a proxy battle to replace a a majority of EQT's 12-person board. That would include keeping Daniel on the board and adding Toby. EQT has agreed to replace three board members, but wants to select the replacements. "We continue to believe that substantial board change is required to achieve the fundamental improvements needed at EQT," Toby and Derek said in a statement, making the case that their proposed seven board member recommendations have the right combination of experience and industry knowledge. The board election is set for July 10, 2019.

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5/17/2019

Blue Lion Files Proxy Statement Seeking to Replace Two HomeStreet Directors

PRNewswire (05/17/19)

Blue Lion Capital, which has a 6.5% stake in HomeStreet Inc. (HMST), has announced that it has filed its definitive proxy materials with the Securities and Exchange Commission and has delivered an open letter to HomeStreet's shareholders. "We have always believed that HomeStreet can be a high-performing bank and a great investment," said Charles W. Griege Jr, managing partner of Blue Lion. "Unfortunately, numerous strategic missteps, inadequate corporate stewardship, and poor financial performance have eroded shareholder confidence and destroyed shareholder value." Blue Lion says, "HomeStreet requires a refreshed Board with the right balance of operating skills, capital markets expertise, relevant industry experience, and a commitment to sound corporate governance practices. Blue Lion also believes that HomeStreet's corporate governance structure has reduced management's accountability to the Board and the Board's accountability to shareholders. Accordingly, Blue Lion is recommending that shareholders support its proposal to have the Board select an independent member of the Board as Chair as promptly as possible. Today, HomeStreet's CEO, Mark Mason, serves in both capacities. Blue Lion believes that one person with the combined role of Chairman and CEO diminishes the CEO's accountability to the Board and the ability of the Board to independently oversee management."

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5/17/2019

Trian Nears Settlement With Legg Mason, Could Get 3-to-4 Board Seats

Wall Street Journal (05/17/19) Lombardo, Cara; Baer, Justin; Chung, Juliet

Legg Mason Inc. is close to reaching a settlement with Trian Fund Management LP that would give Trian three or four seats on its board and stave off a proxy fight, according to sources, who cautioned that talks could still fall apart. The size of the hedge fund's stake isn't clear. Should a deal be completed, it would not be the first time Trian has gained access to the board of Legg Mason, which has $758 billion in assets currently under management. Trian previously owned Legg Mason stock from 2009 to 2016 and CEO Nelson Peltz sat on the Baltimore-based firm's board before stepping down in 2014. Former Legg Mason CEO Mark Fetting stepped down in October 2012 after running the company for four years and facing pressure from Trian. His successor, current CEO Joseph Sullivan, lauded Peltz as "a great partner for me and an important contributor to our turnaround efforts" when Peltz exited the board.

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5/24/2019

U.K. Shareholder Activism and Battles for Corporate Control

Harvard Law School Forum on Corporate Governance and Financial Regulation (05/24/19) Bagot, Sam

Sam Bagot, a partner at Cleary Gottlieb Steen & Hamilton LLP, says a recent U.K. High Court decision, Stobart Group v. Tinkler, considered several issues pertinent to the criticism of boards by shareholder activists who have nominated a director to the board. The case involved London-listed Stobart Group, where shareholders proposed a resolution to remove the company's chairman. The company filed suit against Tinkler, a board director, for breaching his duties by failing to put before the board the matters relating to board composition and strategy on which he disagreed and undermining the board by taking those matters directly to certain major shareholders of Stobart. The High Court held that Tinkler had committed serious breaches of his directors' duties, in particular a breach of the core duty of loyalty to Stobart by speaking to certain significant shareholders, criticizing the board's management, and agitating for the removal of the chairman of Stobart without having raised his concerns and criticisms with the board; and emailing certain major shareholders and employees without prior approval of the board. "This decision clearly highlights the risks to board nominees of shareholder activists of becoming involved in briefing against the board in discussions with shareholders in furtherance of an activist campaign," said Bagot. "The decision also highlights the risks to board nominees of shareholder activists of disclosing confidential management information to shareholders in furtherance of an activist campaign."

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5/23/2019

In Light of Ever-Increasing Cybersecurity Risks, Boards Must Deepen Their Oversight and Engagement

Security Intelligence (05/23/19) Veltsos, Christophe

Boards are uneasy about the various digital risks their organizations face, according to the National Association of Corporate Directors' (NACD) "2019 Governance Outlook." When asked to name the top five trends likely to have the greatest impact this year, respondents pointed to changes in the regulatory climate first (49%), followed by the potential for an economic slowdown a close second (48%), and cybersecurity threats in third (42%). NACD commented on these findings, noting: "companies are bracing for the effects of proliferating cybersecurity and data-privacy rules as regulators play catch-up in overseeing the digital economy." Also according to NACD, 62% of corporate directors view "atypical, disruptive risks" as more important to organizations today than in 2014. While boards are confident about executive leadership's ability to deal with known risks, they are less certain of their preparedness for disruptive risks. In fact, only 19% said they were "extremely" or "very confident" in this regard.

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5/22/2019

Hedge Funds Start to Figure Out Socially Responsible Investing

Bloomberg (05/22/19) Chasan, Emily; Karsh, Melissa

As nearly $31 trillion has moved into investment funds and strategies that focus on environmental, social, and governance (ESG) practices, hedge funds have largely found themselves left out, but they're now beginning to find a way in. Approximately 30% of hedge funds say they're utilizing ESG criteria to inform investment decisions, according to research by data provider Preqin. "The activity level relative to ESG within the hedge fund industry historically has been fairly low, but it's going to increase significantly," said Don Steinbrugge, chief executive officer of hedge fund consultant Agecroft Partners. "It's an area that a lot of institutional investors are thinking about. It's going to be a big growth area." Hedge fund investors such as pension fund clients are inquiring more deeply about climate change and social issues. That means managers must determine if and how to adopt "ethical" or "sustainable" investment practices in an industry known for shorter-term and aggressive bets. Some activist funds, which tend to take longer-term bets, have begun to get involved. Jeff Ubben's ValueAct Capital Management launched a fund in 2018 geared toward social and environmental investments, and Nelson Peltz's Trian Fund Management has promised to support ESG issues. "We're absolutely convinced it is a way to both reduce risk and improve returns," says Clifton S. Robbins, founder and chief executive officer of Blue Harbour Group, which has been including ESG considerations in its investment strategy for three years. Blue Harbour, which manages $2.2 billion, in May issued a report to clients outlining for the first time how often it has urged companies to add wellness programs, boost diversity among senior officers, and called for companies to cut emissions. The firm's analysts and principals have been trained to weigh companies against a 20-page ESG diagnostic questionnaire and to incorporate this data into investment strategies.

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5/21/2019

Coast CIO Interview: FirstGroup CEO in Job 'A Year Too Long'

Bloomberg (05/21/19)

Coast Capital Chief Investment Officer James Rasteh in an interview with Daybreak Europe's Anna Edwards and Matt Miller discusses the hedge fund's turnaround plan for FirstGroup. FirstGroup CEO Matthew Gregory does not have the proper experience to head the transport operator, Rasteh says. For its part, FirstGroup says it "considers the views of all shareholders" and will continue to engage with Coast Capital.

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5/21/2019

The Specter of the Giant Three

Harvard Law School Forum on Corporate Governance and Financial Regulation (05/21/19) Bebchuk, Lucian; Hirst, Scott

Research by Lucian Bebchuk, a professor and director of the Program on Corporate Governance at Harvard Law School, and Scott Hirst, associate law professor at the Boston University School of Law and director of Institutional Investor Research at the Harvard Law School Program on Corporate Governance, on the "Big Three" index fund managers—BlackRock (BLK), Vanguard, and State Street Global Advisors—indicates that there is a real prospect they will grow into the "Giant Three" and dominate shareholder voting in most significant public companies. "We estimate that the Big Three could well cast as much as 40% of the votes in S&P 500 companies within two decades," they write. "We argue that policymakers and others must recognize—and must take seriously—the prospect of a Giant Three scenario." Among other things, they found that more than 80% of all assets flowing into investment funds over the last decade have gone to the Big Three, and the average combined stake in S&P 500 companies held by the Big Three surged from 5.2% in 1998 to 20.5% in 2017. Further, they noted, "Because the Big Three generally vote all of their shares, whereas many of the non-Big-Three shareholders of those companies do not, shares held by the Big Three represented an average of about 25% of the shares voted in director elections at S&P 500 companies in 2018."

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5/20/2019

Shareholder Activism: Boards Need to Assess Vulnerabilities

Mondaq (05/20/19) Grossman, Richard J.; Warrick, Demetrius A.

Shareholder engagement is here to stay, according to Skadden Arps attorneys Richard J. Grossman and Demetrius A. Warrick. Investors are seeking more engagement opportunities outside the United States now that many large companies in the country have addressed vulnerabilities by aligning their corporate governance and capital allocation practices with market standards. Last year, investors focused engagement on mergers and acquisitions; board representation and composition; environmental, social, and governance issues; and company culture and purpose. As the 2019 proxy season gets underway, it will be interesting to see how shareholders respond to the political uncertainty ahead of the 2020 presidential election, unsettled questions on trade and tariffs, and a potential downturn in the market. An economic downturn may create additional opportunities for short investors. Other trends to watch are the blurring of the lines between traditional shareholder engagement and private equity transactions, and the growing influence of passive investors on corporate elections, add Grossman and Warrick.

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5/20/2019

Amazon Faces Investor Pressure Over Facial Recognition

New York Times (05/20/19) Singer, Natasha

Civil liberties groups and lawmakers have raised concerns about facial recognition software. On May 22, Amazon (AMZN) shareholders will vote on whether the tech giant's push to spread the surveillance software threatens civil rights—and, as a consequence, the company's reputation and profits. Shareholders have introduced two proposals on facial recognition. One proposal asks the company to prohibit sales of its facial recognition system, called Amazon Rekognition, to government agencies, unless its board finds that the technology does not facilitate human rights violations. The other proposal asks the company to commission an independent report examining the extent to which Rekognition may threaten civil, human, and privacy rights, and the company's finances. The proposals are nonbinding so the company is not required to take action, even if they receive a majority vote.

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5/20/2019

SEC's Clayton Redefines 'Short-Termism' Concerns to Focus on Deregulatory Agenda

MarketWatch (05/20/19) Goldstein, Steve

The Securities and Exchange Commission (SEC) has announced a roundtable on the short-term management of public companies, which writer Steve Goldstein disscusses. "An undue focus on short-term results among companies may lead to inefficient allocation of capital, reduce long-term returns for Main Street investors, and encumber economic growth," said SEC Chairman Jay Clayton, when announcing the roundtable. The roundtable is set to address whether short-termism plays a role in the declining number of public companies. Participants will discuss the extent to which certain activist practices, such as "empty voting," are factors that drive short-term focus. They will also assess the SEC's ability to reduce burdens for companies while facilitating better disclosure for long-term Main Street investors and potential for certain categories of reporting companies to be given flexibility to determine the frequency of their periodic reporting. There is a place for a deregulatory agenda, "but labeling such an agenda as a focus on 'short-termism' is Orwellian and a bastardization of the very real concerns expressed by people inside and outside the investing sphere," writes Goldstein.

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5/17/2019

A Top Aurora Cannabis Exec Dishes About What It's Like Working With Famed Investor Nelson Peltz

Business Insider (05/17/19) Berke, Jeremy

In a recent interview, Aurora Cannabis (ACB) Chief Corporate Officer Cam Battley discussed the company's unique relationship with billionaire investor Nelson Peltz. He said the arrangement with the hedge fund manager began over a dinner in New York City, with Battley noting, "I think he was really just curious at first. He was interested in this new business that's being born before our eyes." In March, Peltz took a formal role as a strategic advisor to Aurora. "It's really important because some people ask us, 'oh, he's an activist investor, is he trying to take over the company?'" said Battley. "No, his involvement is very different because this is not a mature industry where there's stuff broken that needs to be fixed." He said Peltz is most excited that Aurora is helping to invent a brand new global industry. "So there's no cost-cutting to be done," said Battley. "He's about helping us grow faster because we're still so small compared to where we're going to be in a very short number of years." He added that Peltz has advised the company not to rush into any major partnerships with a single company in the consumer packaged goods, beverage, or tobacco industries, and that Aurora should look to pursue partnerships with multiple companies across multiple different industries.

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5/16/2019

Wanted: Activist Investors in the UAE

Gulf News (05/16/19) Mayenkar, Siddesh Suresh

Activist investors rarely take up a cause in the United Arab Emirates or elsewhere in the region, seldom attending board meetings. However, analysts say the downside for Marka Holding—which was suspended from trading in April 2018 and liquidated amid mounting losses and bank debts—would have been limited if activist shareholders or board members had played their part. Al Mal Capital senior portfolio manager Vrajesh Bhandari said, "Activist shareholders attempt to 'bring about change,' through acquiring a large shareholding and obtaining a seat on the company's board. In the region, given most businesses are tightly held and controlled, not much activism is seen." Menacorp senior financial analyst Issam Kassabieh added, "Governance is a crucial factor to a company's success and is essential for protecting each shareholder's rights. Having said that, it is each shareholder's duty and obligation to ensure proper governance, whether a major or minor shareholder. However, from what we have seen in the past couple of years from companies that have faced issues of that nature, annual general meeting attendance was weak, transactions were gone unquestioned at several times, and from a regulatory aspect took a lengthy period of time to be attended to."

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5/16/2019

The Activist Effect

Investors Chronicle (05/16/19) Wilson, Neil

Shareholder activism is a developing trend in European and U.K. equities. The latest semi-annual report looking at engagement from consultancy Alvarez & Marsal identifies 150 companies, and the United Kingdom accounts for 35% of those facing an imminent threat of activism. Brexit is creating investment opportunities, but investors also are interested in engaging U.K. companies because of the weakness of the pound, underperformance by U.K. equities compared with U.S. peers, and rules that are more favorable for shareholders. Malcolm McKenzie of Alvarez & Marsal says companies in all sectors are potentially attractive, but conglomerates are particularly "on notice" for a call of a break-up. Elliott Management continues to engage Whitbread (WTBDY), even thought it has agreed to sell its Costa Coffee business. Edward Bramson failed to gain a board seat at Barclays (BCS), but is not going away. Cat Rock is engaging Just East (JSTLF), and there are reports that Elliott is looking into Dixons Carphone. Meanwhile, Vodafone (VOD), Centrica (CPYYF), and BT (BT) could see increased investor interest over concerns about their dividends and weak performance of their shares.

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5/16/2019

Booming Buybacks Aren't Likely to Wane Despite Market Volatility

Wall Street Journal (05/16/19) Menton, Jessica

American companies have been buying back their own shares at a hot pace for over a year, and market turbulence is unlikely to stop them now.  According to S&P Dow Jones Indices, the more than 80% of companies in the S&P 500 that have posted results for this year's first quarter repurchased $180 billion worth of their own stock during that time. That's on pace to rank as the second-highest amount on record based on data going back 20-plus years. While data isn't yet available for the April-through-June period, companies ramped up purchasing during the two previous market pullbacks.  Every quarter in 2018 set a new high, as firms were bolstered with money they saved as a result of corporate tax cuts. The most buybacks in one quarter—an astounding $223 billion—came in the last three months of 2018, when broader markets spiraled.

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5/15/2019

Corporations Are Holding Off Investors–but for How Long?

Fast Company (05/15/19) Reader, Ruth

Human, animal, and social rights requests accounted for 25% of shareholder proposals in the first quarter of 2019, up from 14% in 2016, according to a new report from Intelligize. Although shareholder proposals addressing environmental and social issues are on the rise, companies can turn to an array of Securities and Exchange Commission (SEC) rules to bypass these requests. For example, a proposal can be ignored if it too heavily impacts day-to-day operations, if the company feels it has already taken steps to address the issue, or if the proposal is related to operations that account for less than 5% of a company's total assets. As a result, it is rare that these shareholder proposals make it to a vote. From 2016 through the first quarter of 2019, 84% of exclusions were granted under one of these three rules, while just 16% came to a vote. A 2018 report from legal firm Gibson, Dunn, & Crutchfield says it is getting harder for the SEC to justify exclusions. Observers say the SEC might want to tweak its rules to specifically address social and environmental recommendations.

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