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.
Bed Bath & Beyond Overhauls Board Amid Investor Pressure
Bed Bath & Beyond's Revamped Board Fails to Win Over Investors
Knight Vinke Calls for Uniper Split to End Fortum Deadlock
Bramson v Barclays: Big Week for Investor Before AGM Battle
SEC Investor Advocate Cautions on Proxy Adviser Controls
Crystal Amber Takes Aim at Peter Dolan, Chairman of Tech Incubator Allied Minds
Ancora Gets Its Engagement Together
TransAlta Investors End Partnership Ahead of Annual Meeting
Nuveen 2019 Proxy Season Preview
LGIM's Votes Against Directors Increased by More Than One Third Last Year
Shareholder Adviser ISS Backs Barclays in Bramson Battle
Tesla to Cut Down on Board Members
Anthem and UnitedHealth Group Among Top Competitors to Acquire Magellan Health
D.E. Shaw Is to Buck Industry Trend With 3-and-30 Fees
Bill Ackman Thanks Warren Buffett for Pershing Square's Turnaround
Two New Executives Nominated to L Brands Board of Directors
Pernod CEO: In Regular and 'Courteous' Talks With Elliott
Head of Japan's Lixil Bows to Investor Pressure in Boardroom Drama
Elliott Target Pernod Pushes Up Profit Outlook
L Brands Says Hedge Fund to Withdraw Board Nominees After Reaching Agreement
BBB Investors to Announce Their Improvement Plan Next Week
U.S. Investors Abandon Effort to Force TransAlta Into Shareholder Vote Over Brookfield Partnership
Cerner Discloses New Board Members' Ownership Stakes
Engaged Capital Triples Down on Rent-A-Center Bet
SEC Investor Advocate Cautions on Proxy Adviser Controls
Why Activism Paid Off for Dan Loeb's Third Point
2019 Say on Pay & Proxy Results
Analysis: Will Investors Stick With Dual-Class Shares?
Global Firms Aim to 'Change Lives' by Backing U.K.'s Ethical Companies
A Successful Strategy for Activist Investors in Japan: Ask, Don't Tell

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

4/22/2019

Bed Bath & Beyond Overhauls Board Amid Investor Pressure

Wall Street Journal (04/22/19) Chin, Kimberly

Under pressure from investors to turn around its operations, Bed Bath & Beyond Inc. (BBBY) said on April 22 that it will make a series of changes to its board, including the appointment of five new independent directors. The retailer's board will now comprise 10 directors that will vary in race, gender, ethnicity, and experience level, with an average tenure of less than four years. Nine of those directors will be independent, and six will be women, the company said. Meanwhile, five of its current independent directors will step down, and co-founders Warren Eisenberg and Leonard Feinstein will retire from the board and move into the role of co-chairmen emeriti. Effective immediately, Patrick Gaston, current lead independent director, will be named independent chairman. Among other things, Bed Bath & Beyond will form a committee and undergo a strategic review of the whole business; appoint committee chairs to its board audit and compensation committees, which also will be reconstituted; and create a new executive compensation plan that better aligns compensation with the company's performance and long-term shareholder value creation. Legion Partners Asset Management LLC, Macellum Advisors GP LLC, and Ancora Advisors LLC—which control a combined 5% stake in the company—have criticized the company for failing to adapt over time and eroding value for shareholders by allowing costs to increase. They called for CEO Steven Temares to be replaced and nominated a slate of directors for the board. The investors have so far declined the retailer's invitation for them to participate in its plans to overhaul the board.

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4/22/2019

Bed Bath & Beyond's Revamped Board Fails to Win Over Investors

Bloomberg (04/22/19) Lichtenberg, Nick; Deveau, Scott

Despite yielding to some demands of Legion Partners Asset Management LLC, Macellum Advisors, and Ancora Advisors LLC by naming an independent chairman and replacing five independent investors, Bed Bath & Beyond's (BBBY) actions fall short and the retailer failed to provide details on how the new board would create value for shareholders, said the trio of investors. In an April 22 statement, the group said, "The board changes announced today by Bed Bath are not nearly enough when measured against what is needed to address the issues with the current board and management, including that CEO Steven Temares must be held accountable for the company's prolonged poor performance." Although the investors are still reviewing the new directors, their initial assessment is that they lack the necessary skills and retail experience to implement the needed changes. The group said its own slate of 16 independent candidates would be focused on hiring a new CEO, repositioning the company for growth, and implementing best-in-class corporate governance. Under the changes announced earlier on April 22, Bed Bath & Beyond named lead independent director Patrick Gaston as chairman, while Harriet Edelman, Harsha Ramalingam, Andrea Weiss, Mary Winston, and Ann Yerger would join the board as new independent directors. Co-founders and co-Chairmen Warren Eisenberg and Leonard Feinstein are expected to retire from the board as of May 1.

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4/22/2019

Knight Vinke Calls for Uniper Split to End Fortum Deadlock

Reuters (04/22/19) Taylor, Edward; Käckenhoff, Tom

On April 22, Knight Vinke said Uniper (UNPRF) should explore a deeper breakup to overcome the antitrust hurdles that have prevented Finland's Fortum (FOJCF) from taking full control of the German utility. Specifically, the investor—which holds a 5.02% stake in Uniper—wants the company's management to table a motion at its May 22 annual shareholders meeting to prepare a spin-off of Russian utility Unipro. Since 2018, Fortum has amassed a 49.9% stake in Uniper, but Russian authorities have prevented it from gaining full control because a water-testing license owned by Unipro cannot be majority owned by a foreign state entity. In a letter to Uniper's board, Knight Vinke said, "We and other shareholders are very concerned at the state of quasi-paralysis caused by Uniper and its largest shareholder being unable to agree on a strategy for the company for more than a year." The investor said Uniper should legally separate Unipro by splitting off the International Power business of which Unipro is part, or consider a legal separation of Uniper's hydroelectric and nuclear power generation assets in Sweden, Sydkraft AB. Meanwhile, Elliott—which has a 17.84% stake in Uniper—has separately demanded that Uniper's management enter into negotiations with Fortum.

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4/22/2019

Bramson v Barclays: Big Week for Investor Before AGM Battle

The Guardian (United Kingdom) (04/22/19) Makortoff, Kalyeena

Edward Bramson, whose Sherborne Investors vehicle owns a 5.5% stake in Barclays (BCS), will ramp up his battle with CEO Jes Staley this week as he attempts to secure a board seat and force the company to scale back its investment banking division ahead of its May 2 annual meeting. His campaign was given a boost by Pirc, which advises pension funds and other investors, when it abstained on the matter for this year and said shareholders might be advised to vote for Bramson at the 2020 meeting. ISS and Glass Lewis, however, have voiced support for Barclays. Observers note that investors seem to agree with Bramson's assessment that, despite their patience during the bank's long overhaul, shareholders are not reaping large enough rewards. However, few investors believe Bramson should have a seat on the board, having raised concerns about his source of funding and lack of banking experience. According to Ian Gordon, a banking analyst at Investec, Barclays has given a "partial nod to Sherborne's concerns," adding, "Clearly Mr. Bramson would prefer to see more radical and targeted action to reallocate or release capital." Meanwhile, Sherborne said in its latest shareholder letter, "Our public investment record shows that we have consistently assisted boards, that were initially reluctant, to deliver major increases in value for all of the shareholders. We believe that, given mutual goodwill, and some change in perspective, Barclays offers similar opportunities."

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4/22/2019

SEC Investor Advocate Cautions on Proxy Adviser Controls

IR Magazine (04/22/19) Maiden, Ben

Rick Fleming, the Securities and Exchange Commission's (SEC's) investor advocate, sees little inclination among shareholders for change and has urged the SEC not to pursue reforms of the proxy advisory industry. "I think it is fair to say that investors are wary about efforts to regulate proxy advisers," Fleming told attendees at the annual "SEC Speaks" conference earlier in April. "Indeed, at the roundtable on the proxy process that the commission held last November, I think the investors made it pretty clear that they are relatively happy with the services they receive from proxy advisers," he said. "This is not to suggest that proxy advisers are perfect, but to the extent that any problems exist, it seems that their paying customers should be the ones to raise them. Investors certainly don't want those problems to be solved by injecting costly inefficiencies into an already-cumbersome process or by giving companies more opportunities to influence the advice that is given to investors about how they should vote." Investors who want a company's perspective on a shareholder proposal can already access its views in the board's recommendations to vote against the measure that are included in the publicly available proxy materials, he pointed out. These views may also be available in public correspondence with the SEC if the company tries to have the proposal excluded. "What [investors] want from a proxy adviser, and what they are paying for, is independent advice that fits within the parameters they have established for how they want to vote on various matters," he noted. Fleming acknowledged that there is widespread agreement that the proxy process needs attention—for instance, by making the basic structure of the voting system more efficient and reliable by looking into vote confirmation and records reconciliation. "But, absent a groundswell of concerns expressed by actual investors, I sincerely hope that the commission will not prioritize a rulemaking that could impair the independence of proxy advice or lead to even greater inefficiencies in proxy voting," he said.

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4/21/2019

Crystal Amber Takes Aim at Peter Dolan, Chairman of Tech Incubator Allied Minds

The Times (London) (04/21/19) Evans, Peter

Crystal Amber is demanding a breakup of Allied Minds and an overhaul of its pay policy. The firm owns a 2.8% stake in the troubled tech incubator and has threatened to oust Chairman Peter Dolan if its demands are not met. The battle will come to a head when Allied announces its full-year results on April 26. Crystal Amber's Richard Bernstein compares the situation to its dealings this year with van hire company Northgate, noting, "We're an activist and we've got a record, as you saw at Northgate, where we called an [emergency meeting] to remove the chairman and he stepped down with immediate effect."

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4/21/2019

Ancora Gets Its Engagement Together

Crain's Cleveland Business (04/21/19) Nobile, Jeremy

A record 935 public companies were engaged by investors globally last year, up from 609 in 2013. For Ancora Advisors, the strategy is fueled by increased levels of capital being put to work. "We have gone up the food chain because we have more assets to deploy," said Ancora Chairman and CEO Fred DiSanto. "And we're looking at names where clearly there has been some egregious intermingling of both board and management teams." Ancora, part of an investor group that owns 5% of Bed Bath & Beyond Inc. (BBBY), and fellow investors have been pressuring the retailer to replace its 12-person board, and the firm offered up 16 candidates for those board seats. "We just took a position and said we are going to be aggressive," DiSanto said. Meanwhile, the firm has sent a letter to J. Alexander's Holdings Inc. (JAX), where it has an 8.6% stake, offering to take the restaurant company private by acquiring it for $11.75 per share in cash, or $186 million. This marks the first time Ancora has pursued a public-to-private deal. DiSanto said, "Here's a company with a very good brand and good restaurants. They just need to be private." Meanwhile, Jim Chadwick, Ancora's director of alternative investments, noted, "In situations where there is a lack of cooperation from either management or the board, yet Ancora remains convinced that the stock is meaningfully undervalued based on unlocking potential catalyst events, then we would be taking a public-activist posture. We almost always start out constructive, and it's only when things break down we end up in filings."

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4/20/2019

TransAlta Investors End Partnership Ahead of Annual Meeting

Bloomberg (04/20/19) Deveau, Scott

In an April 19 regulatory filing, Mangrove Partners and an entity controlled by C. John Wilder's Bluescape Energy Partners said they would terminate their cooperation agreement ahead of TransAlta Corp.'s (TAC) April 26 annual general meeting. The investors—which together own 10.1% of TransAlta—had said they were prepared to launch a proxy fight at the company to replace five board directors. In addition, they were unsuccessful in efforts to have regulators review a $560 million investment in TransAlta by Brookfield Asset Management Inc. (BAM). Although they did not say whether they had abandoned a proxy fight, observers say it would be challenging for either investor to move forward with their fight at the meeting after failing to file proper paperwork with regulators to pursue the challenge.

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4/19/2019

Nuveen 2019 Proxy Season Preview

Harvard Law School Forum on Corporate Governance and Financial Regulation (04/19/19) Reali, Peter; Garcia, Anthony; Hewitt, Candace

Companies will likely face calls for greater transparency on board refreshment, climate change, and board diversity during the 2019 proxy season due to investors' intensifying demand for accountability on these issues, according to research from Nuveen. On the issue of board refreshment, investors are focused on whether the skills of the board are sufficient to address the growing risks of public companies. Nuveen expects investors to scrutinize the board refreshment track record and policies around future director recruitment to determine if there may be an oversight risk. A record 75 shareholder proposals related to climate change have been filed so far for 2019 annual meetings. Investors are now filing climate risk-related proposals at companies outside the energy sector, requesting companies report on the feasibility of adopting environmentally sustainable business strategies, and are expected to continue to encourage ambitious target-setting, such as achieving net zero emissions. Meanwhile, momentum from shareholder proposals and the wider societal focus on harassment and discrimination affecting workers will likely lead investors to focus more on broader employee-related diversity considerations. Shareholder proposals will likely request enhanced disclosure of detailed employee metrics or greater accountability on issues such as gender-diverse boards.

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4/19/2019

LGIM's Votes Against Directors Increased by More Than One Third Last Year

IR Magazine (04/19/19) Ugwumadu, Judith

Stronger voting policies resulted in a 37% increase in votes against company directors globally last year for the United Kingdom's biggest fund manager. Legal & General Investment Management (LGIM) reports that it voted against 3,864 company directors, adding that those votes were primarily over the issue of board independence and overboarding. LGIM voted against 164 directors in the United Kingdom because of independence concerns, up from 94 in 2017. In the Asia Pacific region, almost three-quarters (70%) of LGIM's votes against directors were due to concerns about board independence. Overboarding was a concern in North America, prompting the money manager to oppose directors of 337 companies in the region. LGIM also voted against corporates that are not taking urgent action on "climate catastrophe," excessive pay, and diversity. The asset manager wants companies to create long-term sustainable business models and deliver value for investors, says Sacha Sadan, LGIM's director of corporate governance.

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4/19/2019

Shareholder Adviser ISS Backs Barclays in Bramson Battle

Financial Times (04/19/19) Crow, David; Walker, Owen

Institutional Shareholder Services (ISS) is siding with Barclays (BCS) in its battle over a board seat sought by Edward Bramson, stating that he has "not presented a sufficiently compelling case" in his campaign to convince other investors to vote him on to the board at the May 2 annual meeting. Bramson, whose Sherborne Investors vehicle holds a 5.5% stake in the U.K.-based lender, is calling on Barclays to boost overall returns by scaling back its underperforming investment bank. Meanwhile, Barclays CEO Jes Staley has pledged to protect Britain's last remaining global investment bank from further cuts. ISS said in a note to its clients on April 19, "The dissident campaign—which is built on a brief investor letter disclosed a few weeks before the annual meeting—falls short of what can reasonably be expected from a shareholder trying to address issues at a £28 billion systemically important bank." The proxy adviser also urged shareholders to give incoming Chairman Nigel Higgins more time to address the bank's issues, noting that he "seems acutely aware of investor discomfort with past performance." Glass Lewis also has recommended that investors vote against Bramson, citing his "questionable share ownership framework." The firm said, "While [Mr. Bramson's] current campaign should serve as something of a clarion call for management...we ultimately believe support for [his] proposal would entail considerably greater risk and uncertainty."

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4/19/2019

Tesla to Cut Down on Board Members

Wall Street Journal (04/19/19) Higgins, Tim

Tesla Inc. (TSLA) plans to reduce the size of its board to seven from 11 directors as part of a number of moves geared toward improving corporate governance. Disclosed in a proxy filing April 19, the phaseout of four board members follows a 2018 Securities and Exchange Commission settlement that required CEO Elon Musk to step down as chairman for three years and the company to add two independent directors. Brad Buss, who's been a board member since 2009, and Linda Johnson Rice, who joined as an independent director in 2017, don't plan to seek re-election this year. The board will not fill their seats. Steve Jurvetson and Antonio Gracias, two early investors, plan to step down in 2020, and those seats also won't be filled. Tesla has also laid out a series of shareholder proposals designed to improve its corporate governance, including the removal of a supermajority voting requirement and shortening director terms from three years to two.

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4/19/2019

Anthem and UnitedHealth Group Among Top Competitors to Acquire Magellan Health

MedCity News (04/19/19) Truong, Kevin

Magellan Health (MGLN) is moving forward with a sale, and potential acquirers include insurers Anthem (ANTM) and United Health Group (UNH) and private equity firm The Carlyle Group. The managed care company and pharmacy benefits manager has a mix of assets, including a Managed Medicaid business and radiology and behavioral health benefits, that could be valuable to strategic investors seeking to broaden their payer profile. Magellan Health has been under pressure from investors to sell itself as a means of increasing value amid a decline in its stock price. Last month, the company forged an agreement with Starboard Value LP, which holds a 9.8% stake in Magellan Health, to add four new independent directors to its board.

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4/19/2019

D.E. Shaw Is to Buck Industry Trend With 3-and-30 Fees

Bloomberg (04/19/19) Karsh, Melissa; Parmar, Hema

D.E. Shaw & Co. is raising fees for its biggest fund at a time when many of its rivals have been forced to slash them. Sources say the New York-based investment firm's new structure, effective at the start of next year, will charge 3% of assets and 30% of profits. This will make D.E. Shaw's one of the pricier funds in the industry. According to a Credit Suisse Group AG survey from August, fees now average 1.45% for management and 17% for performance, down from the traditional 2-and-20 model. The source says D.E. Shaw's $14 billion Composite fund, which is closed to new investors, has charged a 2.5% management fee and 25% incentive fee since 2011. The flagship fund surged 11.2% last year and posted a gain of more than 3% in the first quarter.

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4/19/2019

Bill Ackman Thanks Warren Buffett for Pershing Square's Turnaround

Yahoo! Finance (04/19/19) La Roche, Julia

Pershing Square Capital Management CEO Bill Ackman attributes his huge comeback to years of studying his mentor, Warren Buffett. Although the hedge fund is up more than 40% year-to-date, Ackman is not actively raising capital. At the 13D Active-Passive Investor Summit, Ackman noted that "one of the most instructive things" from his career has been reading the legendary investor's letters from the Buffett Partnership, the fund he ran before Berkshire Hathaway (BRK-A, BRK-B). After several years of outperformance, Buffett told his investors in May 1969 that he would close the partnership, giving partners the option to take their cash out or keep their investment for shares in Berkshire Hathaway. "A bunch of people wanted cash and spent another 50 years seeing their therapists for one of the dumber decisions that they made," Ackman said. "Since 1969, Berkshire is one of the greatest investments of all time. I think it's instructive. And, I think what Mr. Buffett realized in 1969 is that being a long-term investor with short-dated capital is just ultimately going to lead to a bad outcome at some point in time." He said the mission at Pershing Square is to have a permanent capital structure, and the firm took a step in that direction by launching a publicly-traded fund in 2014 with the long-term plan to have a majority of capital in that vehicle. Pershing Square Holdings (PSHZF), the public vehicle, now represents 80% of the firm's capital.

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4/18/2019

Two New Executives Nominated to L Brands Board of Directors

Columbus Dispatch (04/18/19) Feran, Tim

L Brands (LB) will include three executives with expertise in business, finance, governance, and leadership among its nominees for the board of directors at the company's 2019 annual meeting of shareholders. Anne Sheehan and Sarah E. Nash will join incumbent directors Patricia S. Bellinger and L Brands' Chairman and CEO Leslie H. Wexner on the company's slate. If the company's slate is elected, more than 40% of the board will be comprised of women. Sheehan is the chair of the Securities and Exchange Commission's investor advisory committee. Nash is the chair of the board and CEO of privately held Novagard Solutions, a manufacturer of silicone sealants and other industrial products. L Brands also has entered into an agreement with investor Barington Capital Group in which Barington will vote for L Brands' nominees for the board and serve as a special adviser to L Brands.

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4/18/2019

Pernod CEO: In Regular and 'Courteous' Talks With Elliott

Reuters (04/18/19) Vidalon, Dominique; Denis, Pascale

Pernod Ricard (PDRDY) CEO Alexandre Ricard said the spirits group is having regular and "courteous" talks with Elliott. He said, "There is a regular dialogue between the teams, but we do not see them more than other shareholders. My ambition remains to deliver on our strategic plan, that's my motto." The hedge fund is pressuring Pernod to improve profit margins and corporate governance. Elliott said the company's three-year plan, under which it vowed to boost its margins and shareholder returns, was a first small step. As for speculation that Pernod could sell the whole or part of its wine business, Ricard said, "Pernod Ricard has the firm intention to continue to actively manage its portfolio, in terms of either selling or buying."

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4/18/2019

Head of Japan's Lixil Bows to Investor Pressure in Boardroom Drama

Reuters (04/18/19) Fujita, Junko

On April 18, Lixil Group (JSGRY) said Yoichiro Ushioda will resign next month as CEO and chairman of the Japanese toilet maker amid pressure from minority shareholders. Observers say the move may signal that vocal minority shareholders are becoming more successful in changing the management of Japanese companies in the wake of efforts by Prime Minister Shinzo Abe to strengthen corporate governance. Four shareholders—Marathon Asset Management, Indus Capital Partners, Polar Capital Holdings Plc, and Taiyo Pacific Partners LP—called for Ushioda to leave the board along with COO Hirokazu Yamanashi, noting that their appointment last year after Kinay Seto's abrupt resignation as CEO raised concerns about due diligence and corporate governance. The shareholders had called for an extraordinary shareholders' meeting to vote them out, and also called for them to consider resigning their management positions. The company said the meeting would be held in late May, though Ushioda and Yamanashi had requested it be halted.

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4/18/2019

Elliott Target Pernod Pushes Up Profit Outlook

Reuters (04/18/19) Vidalon, Dominique

Pernod Ricard is betting cost savings and Chinese demand will offset a slowdown in quarterly sales growth. The French spirits maker says it is now targeting a rise of around 8% in profit from recurring operations for its 2019 financial year, at the top of 6-8% growth guidance given in February. U.S. hedge fund Elliott Management is engaging Pernod Ricard in an attempt to improve profit margins and corporate governance. Elliott described Pernod Ricard's February vow to lift margins and shareholder returns, under a three-year strategic plan, as a small, first step. The hedge fund is in regular contact with Pernod Ricard. "There is a regular dialogue between the teams, but we do not see them more than other shareholders," said CEO Alexandre Ricard. Organic sales growth of 6.3% in the first nine months of the current financial year is leading Pernod Ricard to look for a 50 basis points improvement in its operating profit margin for the full year.

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4/18/2019

L Brands Says Hedge Fund to Withdraw Board Nominees After Reaching Agreement

Reuters (04/18/19) Venugopal, Aishwarya

L Brands (LB) said April 18 that investor Barington Capital has agreed to withdraw its proposed board nominees and instead will act as a special adviser as part of an agreement with the company. A month ago, Barington had called on L Brands to either consider a spinoff of the poorly performing Victoria's Secret brand or take the much more financially robust Bath & Body Works public. It also had suggested that the role of chairman and chief executive officer be held by separate individuals. Barington now plans to vote in support of the entire slate of L Brands board nominees at its 2019 annual shareholder meeting. As a special adviser, Barington will offer consulting and advisory services to the company for its business, operations, strategic and financial matters, the composition of the board, and possible candidates for nomination. L Brands also announced on April 18 a slate of director nominees for election to the board, which includes its Chairman and CEO Leslie Wexner. Three of the nominees will be for independent directors.

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4/18/2019

BBB Investors to Announce Their Improvement Plan Next Week

Home Textiles Today (04/18/19) Marks, Jennifer

A coalition of investors laid out their case for an overhaul of Bed Bath & Beyond (BBBY) in a presentation at the 13D Monitor Active-Passive Investor Summit on April 16. Legion Partners Holding managing member Christopher S. Kiper, who delivered the presentation, said the group wants to replace the company's entire 12-person board and hire a new CEO. The other investors include Macellum Advisors and Ancora Advisors. The several individuals being offered as alternative nominees to the board include former Pier 1 (PIR) CEO Alexander Smith, former Macy's (M) Vice Chairman Janet Grove, former Gap Inc. (GPS) executive Jeffrey Kirwan, and former Ellery Home Fashions CEO Hugh Rovit.

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4/18/2019

U.S. Investors Abandon Effort to Force TransAlta Into Shareholder Vote Over Brookfield Partnership

Globe and Mail (04/18/19) Jones, Jeffrey

Although Mangrove Partners and its allies—Bluescape Energy Partners LLC and Cove Key Management LP—have abandoned an effort to push securities regulators in Ontario and Alberta to force TransAlta Corp. (TAC) into a shareholder vote on its partnership deal with Brookfield Renewable Partners LP (BEP), they have not said whether they are formally ending a public campaign criticizing the $750 million transaction. They argue that the deal was rushed and prevented a possible sweeter deal for the power producer's hydroelectric assets. The investors wanted TransAlta's annual meeting pushed back to early June so investors could learn more details about the Brookfield deal, and they sought a separate vote on the arrangement. They previously said they plan to nominate five candidates to TransAlta's board at the April 26 annual meeting and would withhold their votes for three directors, including Chairman Gordon Giffin, who were on the special committee that considered the deal. The deal has the support of TransAlta's largest shareholder, RBC Global Asset Management. Institutional Shareholder Services Inc. and Glass Lewis & Co. have recommended that investors vote in favor of the company's director slate.

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4/17/2019

Cerner Discloses New Board Members' Ownership Stakes

Kansas City Business Journal (04/17/19) Lieberman, Lily

Starboard Value says it is pleased with its agreement with Cerner (CERN) that refreshed the health care IT company's board. Cerner added four new directors, with the hedge fund picking two of the board members. Starboard holds a 1.2% stake in Cerner. "We were able to reach a very constructive agreement with (Cerner)," Starboard CEO Jeff Smith recently told CNBC. Filings with the U.S. Securities and Exchange Commission reveal that three of the four new directors own stock in Cerner. John Greisch, former CEO of Hill-Rom Holdings, and Melinda Mount, former president of AliphCom, own 130 shares and 270 shares, respectively, through revocable trusts, while George Riedel, former CEO of Cloudmark, owns 320 shares directly. The stock ownership was disclosed as of April 8, according to the filings. R. Halsey Wise, CEO and founder of private investment firm Lime Barrel Advisors and a former CEO of MedAssets, does not own any Cerner stock at this time.

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4/17/2018

Engaged Capital Triples Down on Rent-A-Center Bet

HFM Global (04/17/18) Kruppa, Miles

At the 13D Monitor Active-Passive Investor Summit on April 16, Glenn Welling, head of Engaged Capital, said his hedge fund has tripled its stake in Rent-A-Center (RCII) since December. Rent-A-Center is now Engaged's largest position. He believes the company's stock should increase 30% to 90% this year as it refinances its debt and continues reducing operating costs. Observers note that Welling is betting on a company that may be excluded from investment by certain environmental, social and governance (ESG) criteria covering predatory lending practices, given that it targets customers with low or non-existent credit scores and aggressively pursues payments. Welling dismissed concerns about the company's leasing practices, saying its financial metrics lag large lenders, and stressed that customers are not locked into long-term agreements. Engaged is in the third year of its engagement with Rent-A-Center, and it won three director seats in 2017. Rent-A-Center's shares are up more than 30% so far this year.

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4/18/2019

SEC Investor Advocate Cautions on Proxy Adviser Controls

Corporate Secretary (04/18/19) Maiden, Ben

Shareholders are relatively happy with the services they receive from proxy advisory firms, according to the Securities and Exchange Commission's investor advocate. Rick Fleming told attendees at the annual "SEC Speaks" conference that proxy advisors are not perfect, but their paying customers should be the ones calling for a reform of the industry. The SEC is facing growing pressure to impose additional regulatory controls on proxy advisors. "Investors certainly don't want those problems to be solved by injecting costly inefficiencies into an already-cumbersome process or by giving companies more opportunities to influence the advice that is given to investors about how they should vote," said Fleming. The SEC does not need to focus on overhauling the proxy advisory industry, according to Fleming. A spokesperson for Institutional Shareholder Services (ISS) defended the transparency of the company and addressed the extent of its influence. Speaking to IR Magazine, the spokesman said ISS recommended against roughly 14% of say-on-pay resolutions for the top 3,000 U.S. companies in 2018, with just 2% failing to pass, and added that the numbers underscore that investors make up their own minds.

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4/18/2019

Why Activism Paid Off for Dan Loeb's Third Point

Institutional Investor (04/18/19) Taub, Stephen

According to the first-quarter letter sent to clients of Third Point's Third Point Offshore fund, activism currently accounts for about 40% of the flagship fund's exposure. Previously, the strategy accounted for no more than 10% to 15% of its assets. However, since Third Point resumed activist investing in 2011, activism has generated an annual return of 21%. The letter from Dan Loeb's hedge fund said, "We believe that our track record and process for making successful activist and constructivist investments provide us with a competitive edge in financial markets." Since 2000, Third Point has engaged in 45 "active or constructive investments," won 24 board seats, and "favorably resolved" each of the nine proxy contests it initiated. The hedge fund said it generally holds conversations with management teams at the companies it engages, and that most management teams are aware of where they are falling behind and will work toward closing these gaps. "Boards of poorly performing companies have their own reasons for inaction but generally they can be traced back to a lack of alignment of interests with shareholders or incompetence," Third Point said, adding that few board members have much "skin in the game." Further, the hedge fund said it is integrating several important metrics into its governance practice, including CEO pay.

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4/18/2019

2019 Say on Pay & Proxy Results

Harvard Law School Forum on Corporate Governance and Financial Regulation (04/18/19) Sirras, Todd; Vanbastelaer, Austin

Average say-on-pay support in 2018 fell to the lowest level since 2012, as more companies received vote support below 70%. There was an increase in shareholder engagement for environmental proposals; other environmental, social, and governance (ESG) topics; board diversity; and the use of GAAP versus non-GAAP performance metrics in compensation program design. This year, shareholders will vote more critically and average vote support will continue to decline, predicts consulting group Semler Brossy. "Shareholders will continue to push company leadership on a broader range of governance issues this year, and we expect that say-on-pay voting will be used as an indirect mechanism for shareholder activism," according to Todd Sirras and Austin Vanbastelaer, managing director and consultant, respectively, at the firm. Semler Brossy expects the say-on-pay failure rate to reach 3% for the first time and the average director election vote result to fall below 95%. The firm also predicts that 20% of Russell 3000 companies will report an alternate CEO pay ratio in 2019. So far this year, two companies (1.4%) have failed say on pay, putting the failure rate 210 basis points lower than the failure rate at this time last year (3.5%).

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4/18/2019

Analysis: Will Investors Stick With Dual-Class Shares?

Bloomberg Law (04/18/19) Rasmussen, Peter

The debate over the use of dual-class shares by public companies was reignited by Lyft Inc.'s (LYFT) IPO, in which company insiders received shares with 20 votes each while shares issued to the public carried only one vote. Under this governance structure, the company's co-founders hold about 5% of Lyft's outstanding shares but control nearly 50% of the voting power. Supporters of the structure say it protects young companies from short-term focused activism, while critics voice concerns about investor rights. As a compromise, some dual-class companies have included time-based sunset provisions in their organizational documents, which means that at a defined time, the super-voting privileges expire and the dual-class structure converts to capitalization with one vote per share. However, there are some concerns about whether mandated sunset terms would be "one size fits all" provisions, and whether these companies should be forced to deal with potential takeover attempts and activist campaigns that might hinder management's efforts to implement strategic objectives after the expiration of an arbitrary time period. While the exchanges have the authority to act in this area, they show little inclination to do so. Observers note that a downturn in performance along with entrenched management may prompt investors to avoid the shares.

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4/17/2019

Global Firms Aim to 'Change Lives' by Backing U.K.'s Ethical Companies

Reuters (04/17/19) Shearman, Sarah

Many large companies are endorsing British firms that aim to do good. For example, global technology giant SAP (SAP) has unveiled plans to promote ethical firms on its 2 trillion pound a year trading platform Ariba. SAP will award more contracts to British social enterprises—firms that aim to do good as well as make a profit—although it did not give details. From a manufacturing company that hires ex-servicemen to a creative agency tackling youth unemployment, a growing number of companies are measuring the impact of their operations and supply chains on major issues, from slavery to climate change. Over the past three years, 15 corporations have awarded contracts worth 65 million pounds (US$85 million) to 250 British social enterprises, creating 637 jobs, according to a report published by Social Enterprise UK. Social Enterprise UK has been brokering these partnerships as part of a campaign launched three years ago to change how companies spend their money.

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4/17/2019

A Successful Strategy for Activist Investors in Japan: Ask, Don't Tell

Wall Street Journal (04/17/19) Bhattacharya, Suryatapa; Davis, River; Narioka, Kosaku

Dozens of activist campaigns are underway in Japan. According to Jefferies analyst Zuhair Khan, "Japan is entering a new era of shareholders becoming more vocal and willing to push out underperforming managements and replace complacent boards." Olympus Corp. (OCPNY) will become the first major Japanese company to bring a U.S. activist on its board when ValueAct Capital partner Robert Hale, whose firm has a 5.5% stake in the company, becomes a director in June. Meanwhile, Toshiba Corp. (TOSYY) is being engaged by King Street Capital Management, which holds a 5.4% stake and is seeking to replace a majority of the company's board. This comes as Prime Minister Shinzo Abe's government has sought to revitalize the economy by shaking up corporate management. Observers note that U.S. investors typically begin with relatively modest suggestions, like adding foreigners to the board, rather than demanding a large special dividend or corporate breakup. They also tend to engage troubled companies where Japanese management and institutional shareholders are open to change. According to executive search firm Spencer Stuart, foreigners account for 3% of board members at Japanese companies, compared with 8% in the United States and 25% in Germany.

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