Procter & Gamble (PG) CEO David Taylor said the recent revelation of a plan to overhaul management structure isn't a forerunner to breaking up the company. P&G gets "tremendous value on being one company," Taylor said in a recent interview. "P&G is not a conglomerate." However, the company is willing "to change anything and everything" to improve results and create value for shareholders, Taylor on Nov. 8 told market analysts at P&G's annual Investor Day. P&G will have six global divisions as of July 1, each of which will be led by a chief executive who will manage product categories and report to Taylor. The division leaders will have direct responsibility for sales, profits, cash, and value creation for P&G's biggest markets. P&G has been working for a number of years to make the company more adaptable and competitive as well as accountable to shareholders, Taylor said. Investor Nelson Peltz, who was invited by Taylor to join P&G's board in March after narrowly losing a bid to be elected a director by shareholders, had suggested dividing the company into three standalone global business units that would be part of a holding company; however, he said he wasn't calling for a breakup. Peltz's Trian Fund Management had more than $3.4 billion in P&G stock.

Alfredo Altavilla and Luigi Gubitosi, both current Telecom Italia board members, are the most likely successors to former CEO Amos Genish, according to a source close to Vivendi. Both candidates were proposed by Elliott when it purged the board after winning its struggle with Vivendi in May. Altavilla is chairman of the TIM Nomination and Remuneration Committee, which establishes executive pay. "It is ironic that the people who worked together to oust Amos Genish are now fighting for his job and the company is in more disarray than ever," the source said.

The Securities and Exchange Commission has issued new guidance on the "economic relevance" and "ordinary business" exceptions for shareholder proposals. Staff legal bulletin 14J addresses the nature of the board analysis the staff would find most "helpful" in evaluating a no-action request to exclude a shareholder proposal, "micromanagement" as a basis for exclusion, and the application of Rule 14a-8(i)(7) to exclude proposals related to senior executive or director compensation matters. In this past proxy season, a number of companies submitted no-action requests that included a discussion of the board's analysis, but they were largely unable to persuade the staff to agree with a request for exclusion of the proposal. Board discussions were not as "helpful" where they did not describe the specific factors considered by the board, but were instead just conclusory or simply described the processes followed by the board, according to the staff. The discussions that the staff "found most helpful focused on the board's analysis and the specific substantive factors the board considered in arriving at its conclusion." The new staff legal bulletin offers guidance on ways to provide a more effective board analysis. For example, regarding proposals that micromanage senior executive or director compensation practices, the staff has now changed its position and does "not believe there is a basis for treating executive compensation proposals differently than other types of proposals." The staff may now agree to exclusion on this basis. The guidance also includes an outline of the types of "specific substantive factors" that the staff expects to see addressed "in sufficient detail" in a "well-developed discussion."

Carl Icahn is dropping his proxy battle and litigation against Dell Technologies Inc. (DVMT) after the company sweetened its offer to holders of its tracking stock. “Largely due to our opposition, today Dell enhanced the deal,” Icahn said in a statement posted to his website Thursday. “We have determined that a proxy fight would be unwinnable and have decided to withdraw our Delaware litigation and terminate our proxy contest,” he said. Dell on Thursday offered $120 per share in cash and stock for the tracking stock and increased the cash portion of the deal to $14 billion from $9 billion in a bid to appease shareholders, among other measures. The company has won public backing for its revised offer from roughly 17% of the tracking stock’s holders, including funds affiliated with Dodge & Cox and Elliott Management Corp. Icahn, who owns a 9.3% stake in DVMT, had criticized the original deal, saying it undervalued shares and that he would do “everything in my power” to halt the proposed merger. In November he sued the company to attempt to gain access to its books and records, saying Dell had refused to provide information related to the deal. Dell had denied Icahn's allegations.

Grace Holdings Ltd., a wholly-owned subsidiary of Seoul-based fund KCGI, has acquired a 9% stake in Hanjin KAL Corp., the holding entity of Hanjin Group that operates the country’s flag carrier Korean Air Lines Co. The move comes after a high-profile owner family scandal pummeled the company's business and stock value. KCGI also announced it will get involved in management decisions such as management, changes to corporate mandates, dividend payouts, and M&As. This marks the first time that a local fund officially announced its intention to push for change at a large Korean company through an active shareholder's role. Hanjin Group Chairman Cho Yang-ho and family members own a combined 28.95% of Hanjin KAL. If KCGI teams up with other major shareholders, their combined 31.81% stake could overwhelm the interests of the family front. Hanjin Group family members came under scrutiny over a number of issues this year. Among other scandals, group chairman Cho Yang-ho faces a court trial on prosecutorial charges on embezzlement and illicit business channeling to profit companies owned by family members.

Top U.S. proxy advisers detailed different processes for sharing their research and voting recommendations with stock issuers at a hearing on Capitol Hill on Thursday. Gary Retelny, CEO of Institutional Shareholder Services (ISS), said his firm distributes drafts of its of research to S&P 500 companies and other large global firms before publishing to its own clients, and offers free copies to all stock issuers eventually. Meanwhile, Katherine Rabin, CEO of Glass, Lewis & Co, said it does not provide the full reports to companies ahead of time and charges for them, although it does share early the underlying data driving its opinions and analysis. Rabin said Glass Lewis tries to share the data well before annual meetings to give executives time to speak to investors on how to vote. “If you're doing it too late I think that companies are sort of scrambling,” she said. The differing approaches could prove important to regulators considering calls from industry groups to impose new rules on the advisers and on other parts of the process used to decide questions at corporate annual meetings. Among other reforms, the U.S. Chamber of Commerce has suggested proxy advisers should show public companies drafts of their research reports to let them check for inaccuracies “or other concerns.”

A half-dozen U.S. senators this week introduced a bipartisan bill to put proxy advisors under the regulatory jurisdiction of the Securities and Exchange Commission (SEC). The Corporate Governance Fairness Act is co-sponsored by Democrats Heidi Heitkamp of North Dakota, Doug Jones of Alabama, and Jack Reed of Rhode Island, along with Republicans John Kennedy of Louisiana, David Perdue of Georgia, and Thom Tillis of North Carolina. Furthermore, it has received the endorsements of the U.S. Chamber of Commerce and the Consumer Federation of America. The bill puts the advice provided by proxy advisory firms like Glass Lewis and Institutional Shareholder Services under the SEC-enforced Investment Advisers Act. The bill calls for the SEC to conduct periodic inspections of proxy advisors, including reviews of potential conflicts of interests. Glass Lewis dismissed concerns about such conflicts, noting that it does not offer consulting services to corporate issuers, directors, dissident shareholders, or shareholder proposal proponents.

Major investors, including fund managers and pension bodies, have signed up to the Embankment Project for Inclusive Capitalism (Epic). The initiative will push companies to disclose hard-to-quantify items such as staffing, governance, and innovation, as well as their effect on society and the environment. At an event in New York on Friday, the group will unveil a series of non-financial metrics that companies can use when communicating with the market.

Paulson & Co. on Thursday demanded the immediate resignation of Detour Gold Corp. (DRGDF) interim CEO Michael Kenyon and board member Alex Morrison. The hedge fund, which said it upped its stake from about 5.4% to 5.7%, added that it does not favor a fire sale of the Canadian gold miner. Paulson said under Kenyon the company "unsuccessfully tried to boost short-term performance" including "questionably running up its accounts payable to exaggerate cash flows." Detour Gold responded that Kenyon would remain in his role until a permanent CEO was named and that Paulson's proxy fight was preventing that. The investor was responding after the gold miner said in a letter to shareholders that the hedge fund's objective was to force a sale and changed tack when it "realized that its fire sale narrative would not win this proxy fight." Thursday's exchange was the latest in the months-long proxy fight between the two sides. Earlier on Thursday, Detour said it had offered to add two of Paulson's nominees to its board to resolve the battle. It also proposed to have Kenyon step down as a director and to begin looking for a new CEO once the proxy contest ends. Detour was willing to settle with Paulson in October, offering to name a new CEO and drop a civil claim. Paulson, however, rejected that offer. Shareholders have until Dec. 7 to vote on the board nominees.

Elliott's increased position in Uniper could pave the way for a new takeover attempt by Finland's Fortum (FOJCY), which is already the German energy group's biggest shareholder, according to sources. Elliott boosted its position to 16.51% on Nov. 7, Uniper revealed in a regulatory filing late Nov. 14, up from 12.8% previously. This additional influence could help break a deadlock in a takeover stalemate between Uniper's management and Fortum, sources said.

Arconic (ARNC) plans to give bidders more time to come up with offers for the aluminum giant in an effort to ease concerns about financial liabilities related to the Grenfell Tower fire in London. Paul Singer's Elliott Management, which is Arconic's biggest shareholder with an 11% stake and holds a board seat, has spoken with Apollo Global Management and Blackstone Group about containing damages. Apollo and a consortium led by Blackstone and the Carlyle Group, the two remaining bidders, had been considering making binding offers that would be contingent on Arconic ridding itself of the liabilities. Potentially massive liabilities from the fatal fire are threatening to derail the sale. Separately, Arconic is trying to sell the construction division that for now carries all the liabilities for the 2017 fire. However, Arconic is not interested in a deal that would be contingent on the outcome of the sale of the construction unit.

Lucerne Capital Management is again calling for Telenet to return more cash to shareholders. In a letter to the Belgian operator published on its website, Lucerne said Telenet should hasten its share buyback program and commit to a long-term policy of returning cash to shareholders; Telenet's EUR 300 million share buyback begun in June appears to be "grinding to a halt," Telenet stated. The letter comes in advance of a Telenet meeting with analysts on Dec. 5. A Nov. 12 statement from Telenet reveals that the company has repurchased just over 4 million shares out of the 7.5 million authorized under the program. However, 3.7 million of the shares repurchased will be used for employee stock awards. There will be little benefit to shareholders, because just 366,000 shares will be canceled. The letter also examines Telenet's valuation compared to similar companies both in EV/EBITDA and FCF yield. While the company is undervalued in the former measure compared to similar companies and its majority shareholder Liberty Global, its free cash flow yield of a forecast 10% in 2019 is significantly higher than peers. Lucerne called on the company to commit to a predictable policy of returning cash to shareholders. Lucerne stated that the expected spectrum auction in Belgium in 2019 should not be an excuse to withhold shareholder compensation, because the spectrum fees are spread over a number of years at minimal amounts.

More than 80% of voting Forest City (FCE.A) shareholders have backed the $11.4 billion sale of the company to Brookfield Asset Management (BAM). The fight for the company was a harrowing one that pitted members of the founding Ratner family against shareholders who had advocated the sale of the real estate developer. The deal is expected to be finalized on or prior to Dec. 10. Brookfield agreed in July to purchase Forest City for $23.35 per share, including the assumption of its debts.

Investors, lawyers, and company representatives are among those who on Nov. 15 are discussing proxy voting mechanics and technology during a roundtable the Securities and Exchange Commission (SEC) has convened. Investors, advisors, and companies want the SEC to modernize a proxy voting system that is expensive, complex, and prone to error. "The P&G situation put a spotlight on issues that have been plaguing the proxy process for years," says Bruce Goldfarb, chief executive of proxy solicitor Okapi Partners. Last year, Nelson Peltz and Proctor & Gamble (PG) engaged in what has been called the most expensive proxy battle, with both sides spending tens of millions of dollars on their campaigns. The proxy battle turned into a debacle when it took two months to determine whether Peltz had won a seat on the company's board. The SEC plans to review how accurate and transparent the voting process is, how to use technology to make the process more efficient, and why retail participation is so low. Retail shareholders voted about 29% of their shares in the most recent proxy season, says Darla Stuckey, chief executive of the Society for Corporate Governance.

Dell Technologies' (DVMT) revised deal to buy out the holders of its tracking stock for VMware is a huge win for the company's owners, Michael Dell and Silver Lake Partners. If the deal is approved by shareholders, Dell and Silver Lake stand to gain $10 billion. Thus far, the market reaction to the $23.9 billion deal, which was announced Nov. 15, has been lackluster. The tracking stock, Dell Technologies Class V (DVMT), rose 50 cents to $106.19 in late morning trading on Nov. 15, well below the $120 per share stated value of the cash-and-stock deal. DVMT trades at a big 32% discount to VMware (VMW), whose shares are up almost 4% to $157.20. The huge gap between the current price of DVMT and the stated value of $120 reflects the low value that investors are putting on Dell's equity relative to the price assumed in the transaction. Investors appear to be valuing Dell equity at about $55 per share—well beneath the stated value of $79.77. Some observers believe the transaction will earn enough support to gain approval with 17% of DVMT holders, including big and influential investors Dodge & Cox and Elliott Management agreeing to support the deal. However, the deal could potentially run into trouble if Carl Icahn, the biggest DVMT holder with a 9.3% position, chooses to oppose it. Icahn has advocated a deal that gives DVMT holder parity with VMware. Despite his stance, Icahn is a pragmatic investor who could gain an estimated $300 million profit on his DVMT holding. That was what he hinted at on Nov. 14, when there was press speculation about an impending deal. "The press is widely reporting that Dell may be raising the price it is willing to pay to buy out our DVMT shares, which we believe is largely the result of our opposition and efforts," he said in a statement, adding that public investors should get board representation, which Dell is now offering. Still, numerous DVMT holders have told Barron's that they wanted at least $120 per share for their stock, and the current deal falls well below that despite the headline value of $120 per share. A shareholder vote is scheduled for Dec. 11, and Dell wants to finalize the transaction by the end of December.

Institutional Shareholder Services Inc. (ISS) recommended that investors in Campbell Soup Co. (CPB) vote for all five of Third Point LLC’s director nominees, according to a report released to ISS clients Wednesday. ISS’s approval of Third Point will likely sway some votes in the hedge fund’s direction or give it additional leverage in settlement discussions as it faces an uphill fight to gain influence over the company. ISS said that even when accounting for headwinds in the packaged-food industry, Campbell has substantially trailed its peers, making board-level change warranted. Daniel Loeb's Third Point argues the current board has done little to improve a slumping stock price and falling soup sales. It is working with George Strawbridge Jr., a descendant of the company's founder. Together, they own a roughly 10% stake. ISS is recommending Third Point's entire slate, which includes Third Point partner Munib Islam, former Blue Buffalo CEO Kurt Schmidt, comScore Inc. President Sarah Hofstetter, former Uber Technologies Inc. executive Bozoma Saint John and former Hostess Brands Inc. CEO William Toler. Glass Lewis, the other primary proxy adviser, recommended soon after that shareholders support three of five Third Point nominees. The shareholder vote is scheduled for Nov. 29.

Detour Gold Corp. (DRGDF) announced Thursday it has reached a deal with Paulson & Co. to appoint two of its nominees to its board. The gold miner also said its interim CEO would resign as a director and it would begin looking for a new CEO once the proxy contest ends. Paulson & Co., which owns a 5% stake in the miner, had called for an overhaul of the board and for the company to explore strategic alternatives including a sale. John Paulson, the hedge fund's manager, said the company had failed to recruit and oversee a management team capable of operating its main mine in a manner that delivers returns to shareholders. In a letter to shareholders on Thursday, Detour said Paulson's objective was to “force a fire sale of Detour Gold,” and that the hedge fund changed its efforts when it “realized that its fire sale narrative would not win this proxy fight.” Detour was willing to settle with Paulson in October, offering to name a new CEO and drop a civil claim. Paulson turned down the offer. Detour has been under pressure from other shareholders as well, including U.S. hedge fund Livermore Partners and investment company Coast Capital Management L.P., which have sought a sale of the company and a board shakeup. Investors have until Dec. 7 to vote on board nominees.

William Ackman has withdrawn his investment in Mondelez International (MDLZ) and turned to potentially more lucrative bets, including Starbucks (SBUX) and Hilton Worldwide Holdings (HLT). Ackman's Pershing Square Capital Management sold out of Mondelez during the third quarter, about three years after spending $5.5 billion for a 7.5% stake, he told clients on a conference call Wednesday. “It was not a barn burner of an investment,” Ackman said, adding that he has found better investments and had a change of heart as chances for an acquisition of Mondelez dwindled. The two most recent additions to the $7.2 billion fund's portfolio are a 1.1% stake in Starbucks and a 3.7% stake in Hilton. Ackman praised management at both companies and his team would soon be meeting with Starbucks. Ackman's private hedge fund is up 9.36% for the year through Nov. 6. Ackman said that much of the recent gains have been fueled by Starbucks and investments in Chipotle Mexican Grill (CMG), which has is up 68% this year, and Automatic Data Processing (ADP), which has risen 23.5% this year. Ackman praised Starbuck's decision to buy back more shares more quickly and said again that he expects the company to grow in China while also taking the right steps to keep pace with current health and wellness trends. Ackman also said that Hilton has a strong pipeline with more hotels scheduled to be opened over the next years and is benefiting from the U.S. corporate tax cuts.

Dell Technologies on Thursday sweetened its offer to buy back shares tied to its interest in software maker VMware (DVMT) to $120 per share, still way short of the $300 price suggested by Carl Icahn. The computer maker in July offered to pay $21.7 billion, or $109 per share, in cash and stock to buy back shares tied to its interest in VMware, returning the computer maker to the stock market without an initial public offering. Icahn, who owns a 9.3% stake in Dell, has opposed the plan, saying the proposed deal massively undervalues the tracking stock. Icahn sued Dell earlier this month and said VMware should be worth $300 per share. The billionaire investor said on Wednesday Class C shareholders should be given basic corporate governance rights, including the right to elect at least three independent directors. Dell said on Thursday that its proposal includes the ability for Class C stockholders to elect an independent director. Dell said Elliott Management and Canyon Partners, which had earlier opposed the deal, have agreed to vote in favor of the revised transaction.

Elliott Management Corp. has again taken a position in LogMeIn Inc. (LOGM), whose shares have dropped 28% this year. Elliott held a 2.4% stake in LogMeIn as of Sept. 30, according to a regulatory filing. The software company's shares fell in July after it cut its guidance for the year, amid a series of execution issues that it said its rivals had taken advantage of. Elliott has a history with LogMeIn. Jesse Cohn, an Elliott partner, sat on the company's board from January 2017 to this past May. He came on to LogMeIn's board as part of its merger with Citrix Systems Inc.'s GoTo family of services, which was spun off. Elliott said in May 2017 that it had taken a position in LogMeIn, and revealed the following November that it had exited its position.

A bipartisan group of senators has introduced a bill that would mandate that the Securities and Exchange Commission (SEC) directly regulate proxy advisers. The bill comes as the U.S. Chamber of Commerce, the National Association of Manufacturers, and other corporate lobbyists are campaigning to curb proxy advisers, which they say have too much influence over corporate democracy. Proxy advisers often support shareholder proposals on issues such as climate change and employee diversity, bringing them into conflict with company management and effectively hijacking the boardroom, some say. They argue proxy advisers should be regulated in a manner similar to rating agencies; and they note that the firms are potentially conflicted because Institutional Shareholder Services, for example, offers consulting services to the same companies on which it provides voting recommendations. The senators' Corporate Governance Fairness Act bill would call for the SEC to regulate proxy advisers directly under the Investment Advisers Act, making the firms subject to periodic SEC examinations, including a serious review of the firms' conflicts of interest policies. The bill has been endorsed by the Consumer Federation of America, the New York Stock Exchange, and the Society for Corporate Governance.

Dell Technologies Inc. (DVMT) could soon reach a deal with some of the leading shareholders of its tracking stock that would ensure their support for the company's plan to return to the public markets, according to sources. The improved terms under consideration would include a larger cash component and could value the tracking stock at about $120 to $130 a share, the sources said. The initial offer in June was for $109 a share in cash and Dell stock, which some investors rejected. An additional item that's being considered is the potential that representatives of some of the shareholders could join Dell's board, the sources said. The share ratio and exact valuation could change depending on how the market values Dell's stock once it starts trading, the sources said. Carl Icahn has been the primary dissenter among holders of the tracking stock, because, he says, the deal that was originally proposed undervalues the shares that track Dell's stake in VMWare Inc. Icahn has pledged to stop the potential merger.

Two shareholders of Restaurant Group Plc on Wednesday demanded that the company cancel its proposed 357-million-pound ($463 million) deal to purchase the Wagamama noodle chain. GrizzlyRock Capital and Vivaldi Asset Management, which manage investment funds that together own 1.9% of Restaurant Group, said the company had not considered risks related to executing the deal. Restaurant Group had announced a deal last month to buy Wagamama to expand its chain of pubs and airport and shopping mall eateries.

Dell Technologies (DVMT) is working with investment banks to add more cash to a $21.7 billion offer to purchase back a "tracking stock" linked to its software company VMware following investor opposition, according to sources. The move comes after a number of investors in the tracking stock, including Carl Icahn, said they would not accept the offer. The investors believe it transfers too much value to Dell's owners, founder Michael Dell and private equity firm Silver Lake. The acquisition of the tracking stock would result in Dell becoming a publicly listed company without an initial public offering. A majority of the holders of the tracking stock must approve the deal. Dell issued the tracking stock in 2016 to purchase EMC, a data storage company, for $67 billion because it could not pay for the full transaction in cash and did not want to increase its debt burden. EMC owned a majority stake in VMware, which Dell inherited. The security relies on, or "tracks," the financial performance of VMware, and has been trading at a substantial discount to VMware's stock. This has emboldened Icahn to argue that Dell's offer undervalues the tracking stock. Dell has thus far offered $109 in cash for each tracking share, up to $9 billion in total, with the remainder payable with 1.3665 shares of Dell's Class C common stock for each tracking share. Dell anticipates using a special dividend from VMware to fund the $9 billion part of the deal. The parties are near a deal, according to sources.

The latest letter sent to South Korean automobile giant Hyundai Motor by Elliott on Nov. 13 drew mixed views in the market on Nov. 14. Some say its requests are reasonable, while others say it is geared toward increasing share prices for affiliates of the automaker in which the hedge fund holds stock. Elliott increased its pressure on Hyundai Motor, demanding it return 12 trillion won ($10.6 billion), or 31% of its market capitalization, to shareholders and blaming top executives for mismanaging capital and thereby causing share price underperformance as well as lower-than-average returns. Elliott also urged Hyundai Mobis to return 4 trillion won, or 22% of its market value, to shareholders, "preferably in the form of share buybacks given the deep valuation discounts." Elliott's demands were supported by a report from automotive consultancy Conway MacKenzie. "Given the cost of delay and the lack of progress made thus far by the Group," Elliott said, "we reserve the right to put forward the various Conway MacKenzie recommendations, among other ideas, as shareholder resolutions in the next general meeting absent an appropriate response from (Hyundai)." Demands from the hedge fund are nothing new, said Kang Sung-jin, an analyst at KB Securities. Some industry observers speculated that Elliott is trying to increase the value of the stock it holds in three Hyundai affiliates before cashing out. Elliott in April said it holds a combined 1.5 trillion won worth of common shares in Hyundai Motor, Kia Motors, and Hyundai Mobis. However, the value of all three has plunged recently. "(Elliott) appears to be making a pre-emptive action to persuade shareholders and to take a favorable position in the general assembly, having Hyundai Motor's announcement on governance reform in mind," Kang said. Hyundai scuttled its governance reform plan in May in the face of strong opposition from investors including Elliott. A new plan by the automobile manufacturer has not been announced yet, despite pressure from the Moon Jae-in government to increase transparency in its governing structure this year. "I don't think Elliott is trying to boost its shares in Hyundai affiliates (for short-term profit making), their plan appears to be very strategic and is designed for long-term engagement," said Bruce Lee, founder and CEO of Zebra Investment.

The owner of the Daily Mail is "plotting" to purchase the i newspaper from Johnston Press, according to broadcaster Sky News. Sky said the potential bid by Daily Mail and General Trust (DMGT) is at a nascent stage but is expected to be put forward in the coming weeks, ahead of a deadline set by Johnston's advisers at Rothschild bank. Johnston Press put itself up for sale in October, as it continues the strategic review it began in 2017 to find a solution to the repayment of £220 million in high-yield bonds, which mature in June 2019. Later in October its biggest shareholder, Custos, raised its stake in the company from approximately 20% to more than 25% to "ensure some of the more insane board or adviser actions can be blocked." In July Custos CEO Christen Ager-Hanssen had threatened Johnston Press with legal action if it were to choose a pre-pack. The i newspaper is one of the publisher's most profitable assets and posted a 61% increase in adjusted EBITDA to £6 million in the group's first-half 2018 results. Sky News said that selling i could raise between £50 million and £100 million in proceeds, much of which would be used to cut Johnston's pension and bondholder obligations.

Former Telecom Italia (TIM) CEO Amos Genish was sent on a business trip to South Korea over the weekend, then sacked Tuesday. He was let go by a board stacked with representatives from Elliott Management Corp., which had become increasingly weary of the executive, who is also a board member. Elliott is TIM's second-biggest investor. Genish criticized the process, arguing he didn't get a fair fight at a board meeting arranged behind his back. "It was not a clean process," Genish said in a phone interview. His firing is "very disappointing" and "unusual" and not aligned with the best practices of corporate governance, he said. Genish, appointed by TIM's top shareholder Vivendi SA in September 2017, has been caught between the two investors ever since Elliott achieved control of the board in May. Genish said he's had difficulty working with the board for many months and that the environment had become "dysfunctional." He said he's "extremely worried" about TIM's future and that he expects "volatile times" ahead as Elliott advocates a breakup of the group. Genish will retain his seat on the board and says he will continue to defend the interest of the company as a director.

Starbucks Corp. (SBUX) intends to lay off about 5% of its global corporate workforce as it looks to become a more flexible company. The coffee chain is struggling to attract new and repeat customers to its U.S. retail locations amid a highly competitive coffee market. In a memo sent to employees on Tuesday, CEO Kevin Johnson said the areas affected include marketing, creative, product, technology, and store development. Starbucks already had started consolidating its analytics teams so that employees in different parts of the company can respond more quickly to changing consumer trends and tweaking its digital marketing strategy. The company also has been concentrating on determining the preferences of customers so it can better engage them with offers that appeal to their ordering behavior. William Ackman has a 1.1% stake in Starbucks, and has said he agrees with the changes Starbucks is making, which includes slowing the pace of store growth in the United States and expanding in China.

Lucerne Capital Management intends to go to court over what it views as corporate governance problems at Telenet. Lucerne has filed a writ in the Brussels commercial court asking for the court to appoint an expert to evaluate corporate governance at the company and its past dealings with Liberty Global and to issue a report on the findings. Lucerne alleges Telenet is violating Belgian conflict of interest and corporate governance rules, due to the excessive influence of its majority shareholder Liberty Global on management. Lucerne has a stake in Telenet of more than 3%.

Vodafone Group Plc (VOD) shares rose 7.1% after CEO Nick Read disclosed stronger than expected results in a fiercely competitive market and kept the dividend stable while he tries to curb debt. Investors were already preparing for Read to end the company's policy of constant dividend growth after the $22 billion takeover of Liberty Global Plc's German and Eastern European businesses stretched leverage at the world's second-largest mobile operator. Vodafone, once a strong competitor to cumbersome former telecom monopolies, is now trying to fend off new low-cost mobile operators while prepping for a surge in spending needed to handle demand for faster networks. Read said the dividend would be unchanged this year but that payouts could go higher once debt returns to the lower end of a target range. Meanwhile, Read may have to face a potential challenge from Elliott Management Corp. Elliott, whose involvement at competitor Telecom Italia led to the firing of its chief executive on Tuesday, reportedly has built a stake in Vodafone but has not publicly commented on its intentions.

Amos Genish, chief executive of Italian phone group Telecom Italia (TIM), was fired on Nov. 13. TIM gave no explanation for Genish's departure, but some directors had viewed him as an obstacle to their campaign for a more aggressive shake-up at the company. The company said it would meet on Nov. 18 to appoint a new chief executive. Genish was appointed in 2017 to run the underperforming former monopoly by TIM's then controlling shareholder, French media group Vivendi, but since then directors backed by Elliott have won control of the board. Genish was pursuing a three-year turnaround plan, concentrating on a digital transformation and fixing TIM's finances, but some Elliott directors wanted him to put higher priority on a possible spin-off of its fixed-line networks, according to sources.

Coast Capital has penned a letter to FirstGroup Plc's chairman calling for the bus and rail operator to implement measures to boost its performance, including reinstating a dividend and separating its U.K. and North American assets. “FirstGroup in its current guise is designed for failure—your 10 years of extraordinary underperformance are proof enough of that,” wrote James Rasteh, founder of Coast Capital. The fund, which says it is a top five shareholder in the Aberdeen, Scotland-based company, also wants FirstGroup to overhaul its board, consult shareholders on hiring a new CEO and management, and launch a sale-and-leaseback on at least some operating assets in its student bus business. “We have collectively compromised too much, for too long, to now settle for half-way solutions,” Rasteh wrote in the Nov. 6 letter, adding that other investors share its opinion. Shares in FirstGroup have declined roughly 27% this year amid poorly performing U.K. rail lines and increased competition from low-cost carriers. Coast Capital has consulted “every CEO in the industry” plus several former FirstGroup managers in devising its proposals, the letter stated. It has also submitted the names of potential director nominees, none of whom have been contacted by the company, Rasteh said.

Premier Foods Plc, which is under pressure from Oasis Management Co., announced Tuesday that CEO Gavin Darby will resign early next year. Premier Foods also said it is in talks with possible buyers of its Ambrosia brand of frozen custard, rather than the Batchelors soup and noodle brand whose divestment Oasis had pushed for. The moves follow a long fight with Oasis, which had been urging the board to remove Darby, arguing that he drove the company into a “zombie-like state.” In July, shareholders voted to keep the CEO in place, even after Paulson & Co. joined the push for new management. “We welcome Gavin Darby's departure, and are optimistic about the path ahead,” Oasis said. “We look forward to Premier Foods accelerating and realizing its true potential.” Darby, who has led the company for nearly six years, was under pressure to revitalize profit and reduce debt. The CEO faced additional scrutiny after McCormick & Co. (MKC) abandoned a takeover effort in April 2016, saying Premier's board wanted too high a price. The decision to resign was related to a change in strategy and had nothing to do with the Oasis campaign, Darby said.

Elliott Management delivered a letter to the board of Hyundai Motor Group on Tuesday declaring the Korean automotive group was holding too much capital and that shareholder returns were lagging industry standards. The fund urged the company to return excess capital to shareholders, review non-core assets, and appoint new independent directors to its respective boards. Elliott Management owns $1.5 billion worth of shares in three Hyundai group companies: Hyundai Motor Co., Kia Motors Corp., and auto-parts maker Hyundai Mobis Co. Ltd. The hedge fund has been calling for an overhaul of the South Korean conglomerate for months. In September, Elliott proposed that a committee review its restructuring proposals with other investors and experts, though this request was spurned by the board. Elliot said Tuesday that non-conforming reporting of cash flows is distorting and hiding the group's true income from operations.

Cevian Capital recently analyzed both Nordea Bank Abp (NRDBY) and its competitors and may be considering purchasing a stake in the Helsinki-based bank, the Dagens Industri newspaper reported Monday. Nordea shares, which have dropped by nearly a fifth this year, rose as much as 3.1% on Tuesday, their biggest gain since mid-July. Cevian's appearance could pressure the largest Nordic bank to focus more on addressing its weak revenue development, according to Jefferies. It also comes on top of recent criticism by Nordea's biggest shareholder, Sampo Oyj, for the bank's “disappointing” returns. Nordea is 19% cheaper now than it was at the end of last year, amid concerns about its return on equity, its revenue performance, and allegations of anti-money laundering breaches. According to Dagens Industri, Cevian may have already bought as many as 34 million shares.

ClearSign Combustion Corp. (CLIR) has commented on the Securities and Exchange Commission filing made by MDB Capital Group co-founder Anthony DiGiandomenico, who's demanding the company call a special shareholders meeting to vote for the removal of ClearSign's existing board of directors and the election of a new slate.  ClearSign Chairman Rob Hoffman remarks, "The Board recognizes the value of refreshing its membership and we are casting a wide net in searching for new members." Hoffman went on to label DiGiandomenico's request as an attempt to bypass the company's previously announced succession plans in favor of placing unvetted candidates on the board and in the CEO job.  "We urge you to reject his request for support to call a special meeting," he appealed to shareholders.

Carl Icahn is accelerating his advance against Dell Technologies' (DVMT) bid to become public in a new 20-page document to VMware tracking stock shareholders calling for them to vote against Dell's proposed VMware stock swap. Icahn has a 9.3% stake in DVMT tracking stock and 2.27 million shares in VMware. Icahn says IBM's (IBM) $34 billion bid to purchase Red Hat (RHT) supports his contention that VMware's value should be worth $300 a share. Dell currently is offering $109 per share to DMVT tracking stock investors. "If Dell's deal is allowed to happen, instead of owning credible and highly desirable VMware, we will own vastly inferior and over-levered Dell," Icahn stated in the document. "Unlike the decaying business of PC hardware, VMware is at the forefront of the rapidly growing cloud infrastructure and business mobility software space. We believe that at VMware's current trading price, the market is under-appreciating VMW's true earnings power as the uptake and ever increasing complexity of the cloud-native world will drive sustainable long-term growth. Based on IBM's recent offer for Red Hat, a deal we should have a comparable valuation to a future VMware deal, VMW should be worth $300 per share." Icahn is suing Dell over the deal and in the document calls the proposal "the Michael Dell/Silver Lake buyout scheme."

ValueAct Capital Management has purchased another $1.1 million of stock in Unifi Inc. (UFI), according to a filing with the Securities and Exchange Commission. Eva Zlotnicka, a vice president at ValueAct Capital, in August was appointed to the board of directors of Unifi. In a filing for previous stock purchases between March 22 and May 11, ValueAct said the securities were undervalued and represented an attractive investment opportunity. Unifi's shares have declined by more than 16% since the May stock purchase. The textile company has been struggling recently with its international competitors. In October, it filed a petition with the U.S. Department of Commerce alleging that illegal dumping of yarn from China and India was harming its operation.

Italy is prepping legislation that could result in a merger of Telecom Italia's (TIM) network with smaller competitor Open Fiber, an issue that is causing friction between the company's CEO and some board directors, according to a source. Open Fiber has been rolling out a fiber optic network across Italy, in direct competition with TIM. Industry observers say such duplication makes little economic sense. Another source said the legislation could be an amendment to a draft law approved in September that still needs parliament's approval. If that bill gets sidetracked, it could be part of another law, the source said. TIM, whose leading shareholder is French media group Vivendi, has already started a process to put its network assets into a separate company, NetCo, which would be completely controlled by TIM. TIM CEO Amos Genish has not ruled out selling a stake in NetCo at some point, but wants TIM to retain control. In June, Genish said he was eager to talk about combining TIM's fiber-to-the-home broadband assets with those of Open Fiber, but not the entire infrastructure. The network matter was front and center earlier this year when Elliott took a stake in TIM to call for for a governance overhaul and restructuring, including a spin-off and partial sale of NetCo. Since Elliott's involvement, Genish has been caught in the middle of the struggle between Vivendi and Elliott, which eventually wrested board control away from the French group at a shareholder meeting in May. Genish hopes to finalize a three-year plan launched in March to overhaul TIM and shore up its finances, but he has come under pressure due to more robust competition at home and a large financial outlay to secure airwaves in Italy's fifth-generation mobile auction. TIM's shares have fallen almost 30% this year, and some Elliott-appointed directors are now advocating Genish's resignation because he opposes TIM losing control of its infrastructure, according to sources.

Third Point LLC, which has approximately a 7% stake in Campbell Soup Co., today sent a letter to Keith R. McLoughlin, Campbell's chief executive officer, in response to the company's press release on Friday afternoon. The letter says in part: "On Friday, Campbell disclosed publicly the existence of our private settlement talks. We were pleased that your statement acknowledged that changes to the Board would be beneficial and that the Independent Short Slate nominees are well-qualified to contribute to a refreshed recipe at Campbell. This is an important point of agreement and reflects shareholders' similar desire for a combined Board. Nevertheless, we were disappointed that you chose to share our private negotiations via a press release, as we believed that our limited conversations were confidential. ... we were particularly interested in your comments about the types of directors you are seeking to add to the Board and your embrace of two of our candidates, Kurt Schmidt and Sarah Hofstetter."

Third Point LLC, which has approximately a 7% stake in Campbell Soup Co. (CPB), has released a video introducing its independent short slate board candidates: Sarah Hofstetter, Munib Islam, William Toler, Bozoma Saint John, and Kurt Schmidt. The nominees discuss what has gone wrong at Campbell and their enthusiasm for serving shareholders to #RefreshTheRecipe at the company.

Private equity firm Veritas Capital and hedge fund Elliott Management have agreed to purchase U.S. healthcare software maker Athenahealth Inc. (ATHN) for $5.5 billion. Athenahealth's cloud-based service is used to track revenue from doctors, patients, and hospitals. It had been under pressure to sell itself from Elliott, which has a nearly 9% stake in the company. The acquisition values Athenahealth at nearly $135 a share.

Campbell Soup Co. (CPB) has reportedly begun the process of selling off a number of its brands, including its Arnott’s cookie and crackers business, as it looks to pay down the debt left in the wake of its acquisition of Snyder’s Lance earlier this year. The soup company had previously said it planned to sell its international and fresh food businesses after a three-month review it announced after a string of poor quarterly results. The decision came despite pressure from Third Point, which initially said the only justifiable outcome of the review was a sale to a strategic buyer. Third Point has since said it would also accept other moves for Campbell, including a breakup. Campbell has sent out materials to tease the sale of its Australian Arnott’s biscuits business and Kelsen baked snacks that could get $2.5 billion to $3 billion from buyers. The biscuit and cracker maker is the largest in Australia and has caught the eye of a number of food companies that are eyeing global expansion. Arnott’s gives buyers a chance to buy a large business in an established market, though, with Australia relatively isolated, it would also likely require a buyer with an existing global footprint. Campbell expects to sign non-disclosure agreements for its international snack business in the next weeks. One likely consideration in the sale process is potential anti-trust issues due to Arnott’s hold on the Australian cookie market. Campbell is under pressure from Third Point over poor performance, making it unlikely it will want to take on much risk that antitrust authorities could oppose a deal.

Blue Harbour Group disclosed a new stake in restaurant chain Jack in the Box Inc. (JACK) and may push for changes at the company. The investor owns a 6.8% stake in the fast-food company and believes it is undervalued, according to a regulatory filing. Blue Harbour has concluded Jack in the Box made the right decision to sell Qdoba Restaurant Corp. and divest a majority of its remaining company-owned units. Jack in the Box is now in a position to reap the benefits of a more focused corporate entity with improved profitability, according to Blue Harbour. The firm has held talks with management and other parties, and may continue to seek discussions on topics including capital structure, board composition, and strategic alternatives, the filing shows. "As Jack in the Box executes its plan, our lens will be steady on the company’s progress toward unlocking and delivering value we see in it," said Blue Harbour managing director Robb LeMasters in a statement. Jack in the Box reached an agreement last month with Jana Partners, the fund run by Barry Rosenstein, which will see two new directors appointed to the board.

Barclays (BCS) Chief Executive Jes Staley and Chairman John McFarlane will meet investor Edward Bramson in New York this week over calls to downsize the investment bank's markets division. The meeting comes as Barclays received backing from top shareholder James Lowen, who said that a decision to scale back the division would be "snatching defeat from the jaws of victory," as the bank’s profits jumped to £1.5 billion, up from £1.1 billion last year. Bramson, who increased his stake in the bank from 5.16% to 5.41% in April, began meeting with other shareholders to gain their backing over changes to the investment bank earlier this year. Bramson, the head of Sherborne Investors Management, reportedly told large investors he wanted the bank to up returns from its investment bank and increase payouts to shareholders. Sherborne's stake in Barclays allows it to call extraordinary general meetings to put motions to shareholders, including over board appointments.

The Securities and Exchange Commission (SEC) is being urged to ignore demands from big business to dilute shareholders' ability to file resolutions at annual meetings. A group of 30 investors has written a letter to SEC Chairman Jay Clayton on the issue ahead of a round-table meeting this week, at which SEC staff are set to examine the use of shareholder motions at annual meetings, among other issues. The focus on shareholder resolutions comes as corporate trade groups and businesses increase criticism of the current system, saying it is burdensome and prone to abuse.

A number of Britain's largest public companies will be challenged to boost the representation of women on their boards amid concerns that many have adopted a "one and done" approach to gender diversity. A review of British boardrooms has found that approximately 75 companies in the FTSE-350 have just one female board member. The review, which will be released Tuesday, is expected to say that companies with a single woman director risk being accused of tokenism. The review also is expected to spotlight the lack of women chairs, senior independent directors, and chairs of boardroom committees. Twenty-two women, including Susan Kilsby at Shire and Deanna Oppenheimer at Hargreaves Lansdown, chair major public companies, versus 328 chaired by men.

In a Nov. 9 letter to Campbell Soup Co. (CPB) Chairman Les Vinney, Daniel Loeb's Third Point said it would reduce the size of its board slate to five nominees. Initially, the hedge fund aimed to replace the company's entire 12-member board. Third Point reduced its number of nominees after hearing from shareholders that they would prefer a settlement in which some of Third Point's nominees join the current board, according to the letter. The hedge fund's reduced slate includes Third Point partner Munib Islam, comScore Inc. (SCOR) President Sarah Hofstetter, former Uber Technologies Inc. executive Bozoma Saint John, former Blue Buffalo CEO Kurt Schmidt, and former Hostess Brands Inc. CEO William Toler. Third Point holds about 7% of Campbell stock.

Macquarie Investment Management has joined Land & Buildings Investment Management LLC in calling for Brookdale Senior Living Inc. (BKD) to sell itself. In a Nov. 9 letter to shareholders, Macquarie said they should push for changes to Brookdale's business model, including selling company-owned real estate or selling the entire company. According to Macquarie, Brookdale's stock is trading at a 50% discount compared to the estimated value of its real estate, and the best way to close the gap is to sell assets. "[W]e are concerned that management has not identified the clear opportunity to aggressively sell real estate holdings in an effort to stabilize the business," the letter states. "We believe now is the ideal time to unlock this embedded value." Macquarie has a 3.7% stake in Brookdale worth more than $68 million, making it the company's eighth-largest investor. Together with Land & Buildings, the two investors own 7.5% of the company, which would represent Brookdale's third-largest shareholder.

Despite a blowout quarter for Barclays Plc's (BCS) investment bank, a source says Sherborne Investors' Edward Bramson is stepping up a campaign to shrink the British lender's trading business by garnering support from its non-executive directors. Bramson reportedly has been courting fellow shareholders in California, New York, and London in recent weeks, and has told some that he could boost his stake in the lender. The source notes that Bramson's current investment of more than 5% allows him to call a general meeting of shareholders, but this is not the preferred route. According to the source, Bramson has reiterated that he does not want Barclays to pour more capital into its corporate and investment bank, which is its lowest-return business. Barclays' stock has fallen more than 20% since CEO Jes Staley assumed control in December 2015. Bramson is expected to meet Nigel Higgins, who was appointed to succeed John McFarlane as chairman and is seen as a likely supporter of Staley, in the next few weeks, the source said.

On Nov. 9, Thyssenkrupp AG (TKAMY) saw its shares fall 11%—the biggest drop in two years—following its second profit warning in four months. This underscores the issues the company faces as it looks to boost returns with a comprehensive overhaul. Declining profits prompted Cevian Capital AB, one of the company's biggest shareholders with an 18% stake, and Elliott Management Corp. earlier this year to push for a major overhaul, and in September, Thyssenkrupp said it would split itself into two separately listed companies in an effort to extract more value from its vast array of activities with little to no overlap. Its latest profits warning primarily blames an ongoing cartel probe in Germany.

The Securities and Exchange Commission will hold a roundtable on the proxy process on Nov. 15 and next year might consider rule changes in areas such as raising the bar on submitting shareholder proposals. Corporate America has complained for more than a decade that voting rules have enabled special interests and proxy advisory firms to hijack their boardrooms with costly demands. The changes that business groups are seeking also could lead to stricter conflict of interest disclosure rules for proxy advisors. The effort to diminish voting rights will face push back from some investors. A move to dramatically raise the threshold for submitting shareholder proposals will be met with resistance, according to some investors. Some worry that a higher threshold would muffle legitimate shareholder concerns and lead to other damaging rule changes. "Some institutional investors say it's not broke, don't fix it. Why open the door to potential damage?" says Amy Borrus, deputy director of the Council of Institutional Investors.

Procter & Gamble Co. (PG) on Thursday announced plans to revamp its management structure, shrinking the number of business units from 10 to a half-dozen and giving the heads of those products control over regional sales teams and some functions previously overseen by headquarters. The new organization, which is part of an effort by the conglomerate to streamline its operations, will take effect July 1, 2019. Each of the six business units' CEOs will report to P&G Chief Executive David Taylor. The CEOs of the business units are the same that are currently overseeing those product categories. Four unit presidents will now report to these unit CEOs, and the roles of two of the sales presidents will be diminished. Each unit CEO will be responsible for direct sales, as well as product innovation and supply chains for the 10 biggest geographic markets. P&G's decision to streamline its structure comes after investor Nelson Peltz joined the company's board of directors near the end of this year's first quarter after a prolonged proxy battle. Peltz had previously petitioned for a simplified structure, saying it would improve agility, accountability, and responsiveness to local needs.

ADW Capital Management, LLC has written a letter to the board of Fiat Chrysler Automobiles, N.V. (FCAU) proposing steps it could take to eliminate the "turnaround valuation" and allow the company to deliver best-in-class shareholder returns. The investor applauded management and the board for their successful efforts and "unrivaled" operational track record over recent years. However, although the investor is "extremely pleased" with the company's results, it believes the market's perception of FCA as a struggling turnaround has persisted and is clearly reflected in the Company's current valuation. While FCA has premium brands which are secularly growing, the company trades at a significant discount to its closest peers. ADW's recommendations focus on narrowing the U.S OEM valuation disconnect, capital allocation, and OEM consolidation.

Premier Investments Chairman Solomon Lew has expanded his deplorables list to include any shareholder that continues to back Myer Executive Chairman Gary Hounsell. Lew on Nov. 9 increased his assault on the department store's board, calling again for the retailer to immediately disclose first-quarter sales ending Oct. 27. Lew has said shareholders must be fully informed before the annual meeting due to take place Nov. 30, when they will vote on Myer's compensation report and the re-election of directors. Lew said in a statement that "Hounsell and the Myer board cannot be backed by any serious investor"—in what appears to be a shot taken at fund manager Geoff Wilson, who has emerged as a new key player in the drama. Lew, over the last 18 months or so, has been attempting to unseat the board, primarily via a campaign of public criticism. However, the board has dug in. Now three of the funds managed by Wilson Asset Management have emerged on the register. Their combined stake is 5.5%. Wilson has called for giving new chief executive John King time to implement his strategies.

Telecom Italia SpA has abandoned a debt-reduction target and intends to write down the value of its assets by roughly 2 billion euros ($2.3 billion). The double dose of bad news highlights the challenge facing CEO Amos Genish, who has been trying to revitalize the debt-ridden company under pressure from Elliott Management Corp.. Telecom Italia has not paid a dividend on its ordinary shares since 2013 and is spending billions of euros on frequencies for faster 5G mobile services. The carrier's biggest shareholder, Vivendi SA, installed Genish last fall only for the French company to lose control of the board to Elliott in May. The CEO has walked a tight rope ever since. Telecom Italia shares fell nearly 4% on the news, bringing their decline this year to 28% and pushing down the company's market value to 10.6 billion euros. Genish's future at Telecom Italia has been uncertain since sources said in September that board directors representing Elliott, the second-largest shareholder, had grown more impatient over his handling of the company. Genish has focused on growing the business organically, while the U.S. investor reportedly wants him to make changes like selling a stake in its towers company and a full spinoff of the fixed-line network.

Daniel Loeb's battle with Campbell Soup (CPB) will culminate on Nov. 29, when shareholders vote on a proposal by his hedge fund Third Point to take five seats on the company's board. Loeb, who controls more than 7% of Campbell stock through Third Point, has spent months exchanging barbed letters with the company. He is pushing for the sale or restructuring of the slumping food giant. Earnings were down 50% last quarter, soup sales have been eroding, and the company's chief executive, Denise Morrison, stepped down under pressure in May. Loeb is taking on descendants of John T. Dorrance, a chemist who devised the formula for condensed soup at the turn of the last century. The family owns more than 40% of the company. Loeb has persuaded one dissident Dorrance heir and a former Campbell board member, George Strawbridge Jr., to join his campaign, but will need to win over many more shareholders to be successful. "Soup was de-emphasized and ignored and Third Point is right that it is the first thing that has to be addressed," says Strawbridge, who owns nearly 3% of the company. On Wednesday, Loeb's board nominees won the endorsement of Institutional Shareholder Services.

Vivendi's battle with Elliott Management over the running of Telecom Italia (TI) has prompted market speculation that the French media group could sell its stake in the company. However, CEO Arnaud de Puyfontaine on Thursday told analysts, "I can tell you that this is completely and utterly wrong." Vivendi owns a 24% stake in Telecom Italia, but directors backed by Elliott wrested control of the board of the underperforming former monopoly last year. This week, Telecom Italia sacked CEO Amos Genish, who was appointed last year to run the company. Some directors saw Genish as an obstacle to their campaign for a more aggressive shake-up at the company. Vivendi reacted angrily, calling the ouster, which occurred while Genish was away on business in Asia, mean and cynical. Vivendi will remain a long-term investor in Telecom Italia, said de Puyfontaine. The holding company of billionaire Vincent Bollore has roughly 29% of the voting rights in Vivendi and 26% of Vivendi's share capital.

Unintended consequences have resulted from the Securities and Exchange Commission (SEC) rule that requires all institutional investors to vote on all matters put forth in proxy statements, or the measures voted on during shareholder meetings. The SEC roundtable on Nov. 15 recognized that this is due to the growing clout of Glass Lewis and Institutional Shareholder Services (ISS), writes Wayne Winegarden, a senior fellow in business and economics at the Pacific Research Institute and the principal of Capitol Economic Advisors. Both ISS and Glass Lewis sponsor environmental, social, and corporate governance (ESG) programs, and thus have a preordained belief that pro-ESG proxy statements should be supported. As a result, their advice has clear bias on ESG issues that is not adequately disclosed. Moreover, it is inevitable that ESG policies and investing preferences will clash when it comes to institutional investors, since public pension funds represent many individuals. And many studies examining ESG have found that automatically screening out investment options, or imposing uneconomic constraints, harms financial results. The large unfunded liabilities of public sector pension funds worsen these costs. The SEC should require conflict of interest disclosures and consider eliminating the requirement that institutional investors vote on all items on corporate proxy statements, according to Winegarden.

Pension and investment funds are negotiating with public companies on ways to limit the role of shareholders. The discussions between the Council of Institutional Investors, which represents big pensions and investors, the Business Roundtable, which represents big U.S. companies, and others are aimed at reining in the proxy balloting process. The groups are negotiating on recommended changes to raise the thresholds for getting a shareholder proposal up for a vote at annual company meetings. "You should have to show that you're on the path to majority approval," says Maria Ghazal, senior vice president at the Business Roundtable. Amy Borrus, deputy director at the Council of Institutional Investors, says the groups are "engaged in a dialog on a number of issues, including resubmission thresholds, to clarify differences and see if we can find common ground." Companies say that the current thresholds are too low and permit shareholders to repeatedly submit proposals that have little chance of garnering support. Current regulations permit shareholders to reintroduce proposals if they earn a minimum of 3% of shareholder support on the first try, 6% on the second, and 10% on the third. The U.S. Chamber of Commerce and other groups have campaigned against those thresholds, arguing they permit "zombie" proposals to reappear on proxy ballots year after year. Companies and pension and investment funds also are weighing the possibility of increasing the minimum dollar amount of stock that shareholders must hold to submit a proposal, up from the current limit of $2,000. Investor John Chevedden, who routinely submits proposals, says the move to increase thresholds would put up unnecessary barriers for small investors.

Something has to change at Campbell Soup Co. (CPB), according to Wall Street Journal contributor Aaron Back. Its shares have underperformed the S&P 500 Packaged Food and Meals index by more than 20% over the past two years, and its U.S. soup sales are also on the decline. Adding Third Point’s nominees to the company’s board and agreeing to put more emphasis on revitalizing the core soup business, such as by using updated recipes and ingredients, will be beneficial to the company, he writes. The hedge fund, which was originally seeking to replace the entire board, is now proposing to replace five out of 12 board members. Institutional Shareholder Services (ISS) issued a report on Wednesday that takes Third Point's side. “The company views the core Campbell's and Chunky brands as mature businesses, implying that investments into new products and packaging might not achieve an acceptable return,” ISS said. The proxy adviser praised Third Point for “advocating greater investment in the core business to build long-term value,” rather than demanding deep cost cuts to boost short-term performance as activists are sometimes known to do. ISS also argues there is a lack of relevant experience in consumer packaged goods on Campbell's board. Third Point's nominees' experience could aid a turnaround, says Back. They include the former CEO of Blue Buffalo, the rapidly growing pet food company, the former CEO of Hostess Brands, and the former CEO of an advertising firm. Finally, Campbell objects to adding one Third Point partner to the board. "But given that it now owns 7% of the company, Third Point deserves some representation," Back concludes. "Descendants of the company's founder own around 41% of the company and have three seats on the board. Those family members recently have failed as stewards of the company. Shareholders should insist that they share more control."

Britain's technology sector lags significantly behind the FTSE 100 and the broader economy on measures including gender, race, and class representation, according to a report from Inclusive Boards. The report found that only 8.5% of senior tech leaders come from a minority background, while women make up just 12.6% of board members in the sector—versus 30% female representation that has been achieved across the FTSE 100. "It's very, very dangerous and alarming to see that particular groups are not being able to fully participate in the sector, and in a sense are being left behind," said Inclusive Boards' director Samuel Kasumu. The report also found that nearly two-thirds of boards and more than 40% of senior leadership teams lack female representation entirely. The report was based on data gathered from 500 of Britain's biggest tech companies.

Private equity firm Veritas Capital and Evergreen Coast Capital, the buyout arm of Elliott Management, are set to acquire Athenahealth (ATHN) for $135 a share, or about $5.7 billion. Elliott offered $160 a share in May while criticizing the healthcare technology company for missing financial targets and an uninspiring push for margin improvements. The high-profile process, which included leaks and the ouster of CEO Jonathan Bush after allegations of physical abuse and other inappropriate behavior, contributed to the poor performance of Athenahealth, but the company also needed to focus more on new sources of growth while keeping costs in check, writes Bloomberg Opinion columnist Brooke Sutherland. Veritas plans to merge Athenahealth with the healthcare IT assets it acquired earlier this year from General Electric (GE). Evergreen will retain only a minority interest in the combination of Athenahealth and those GE assets (now dubbed Virence), a big adjustment from its earlier bid. The takeover price is a 27% premium to Athenahealth's closing price on May 17, 2017, the day prior to Elliott's initial disclosure of a roughly 9% stake in the company. The hedge fund's average cost basis was below $120 a share, according to an analysis of Elliott's 13D regulatory filings on Athenahealth. Ultimately, this marks a good ending for this messy situation, according to Sutherland.

Elliott Capital Management scored a big win on Tuesday with the ouster of Amos Genish, Telecom Italia's (TIM's) chief executive and an appointee of Vivendi. Yet the battle over the Italian carrier is not over. Vincent Bollore, the billionaire who controls Vivendi, could fight back with a new shareholder vote. Whoever steps in as Genish's successor must figure out whether they want to bow to Elliott or be remembered in Italy as the savior of the former national carrier. Perhaps there's a happy middle road, where it's still possible to sell stakes in the fixed network, for instance, without deconsolidating it. Vivendi, meanwhile, is in a tough spot. While the top two investors fight over the company's strategy, the Italian state isn't helping matters. It's the third-biggest shareholder in TIM through the state-backed lender Cassa Depositi e Prestiti, which voted for the Elliott slate in May. On Sunday, Deputy Premier Luigi Di Maio said he wanted a "single Italian player" to make internet and broadband available to everyone. That would seem to benefit Elliott, which has been urging a sale of the fixed network business. If Vivendi is facing a united front from Elliott and the Italian state, it has two options: sell its stake—which seems unlikely—or call another shareholder vote on the composition of the board. If Vivendi wants to succeed in a new vote, it's going to need to do more than just weigh against its rival's plan. Bollore's best hope is to be much more transparent about his long-term intentions for TIM.

Paul Singer's campaign against Bezeq Israeli Telecommunication has served as a catalyst for shareholders to assert themselves in companies in Israel. In January, Elliott Management disclosed a large stake in the country's biggest telecommunications company and demanded an overhaul of the board, and within a few months, loyalists of Bezeq's owner were replaced with independents. After Elliott's campaign, more shareholders started to follow suit, taking on Israel's largest grocery chain and its second-biggest oil refinery. Elliott's victory over a business magnate in Israel resonated with investors because of the hedge fund's reputation and the visibility of the campaign. Singer took on Shaul Elovitch, a high-profile tycoon who personified a business ownership model dating back to the 1980s. A new law in 2013 sought to limit the influence of tycoons by splitting conglomerates that owned major financial and industrial companies. More tycoons have to reduce holdings by the end of next year to comply with the concentration law. "There are going to be quite a few Israeli companies worth billions of dollars in the not-too-distant future with enough meat for activists," says Amir Shachar, a partner in the Israeli law firm Shibolet & Co. who specializes in areas such as corporate governance.

According to the Hampton-Alexander women on boards review, the number of female chief executives at the largest listed U.K. companies fell from 15 to 12 over the past year. Meanwhile, there was slight improvement in the number of female chairs in the FTSE 350, which rose from 17 to 22. MP Nicky Morgan said the "lack of progress calls into serious question the possibility of achieving the U.K.'s target of 33% by 2020 which I set as Minister for Women and Equalities in 2015." Currently, there are five all-male boards in the FTSE 100, 45 in the FTSE 250, and 75 FTSE 350 companies with only one woman on their board.

Telecom Italia (TIM) CEO Amos Genish has retained his job even though the company's stock has lost a third of its value since his appointment last year and last week it wrote down $2.3 billion and scuttled a key debt-reduction goal. Rumors of Genish's departure have surfaced repeatedly since his primary supporter Vivendi SA lost control of the board to Elliott Management Corp. and its allies in May. Italian newspaper Messaggero said over the weekend that TIM would hold an extraordinary board meeting this week to oust him, although the company denied the report. Elliott has sent mixed signals about whether it supports Genish since it took a stake in TIM in March and called for corporate governance reforms and asset sales. It has publicly supported his plan to separate the company's fixed-line business and spend billions of euros to gain an edge in fifth-generation mobile services, but has also signaled it opposes much of his approach. Elliott clearly wants Genish to be more radical in fixing the company, which has huge debt and pension liabilities. The tension became public in June when Genish criticized unidentified directors for feeding "untrue and unreliable speculation." The board asked him to explain his comments and he apologized. In September, sources said directors representing Elliott have grown impatient over his handling of the company. Messaggero reported that Chairman Fulvio Conti is considering board member Alfredo Altavilla and Italian veteran executive Rocco Sabelli as potential successors. Sources have also mentioned Altavilla as a potential candidate along with another TIM board member, Luigi Gubitosi. Elliott and the Italian government support Genish's plan to separate the fixed-line network but want him to spin off more than 51% of the business to give it full independence. Elliott argues this would make it far more valuable.

Activist funds in Japan have climbed more than 50% since 2017, reaching record levels, in a sign that government efforts to impact the nation's opaque corporate governance are starting to take effect. IR Japan, one of the nation's top investor relations consultancies, had identified 25 activist funds investing in Japanese stocks as of October, up by nine from 2017. Funds calling for change at Japanese companies include Oasis Management, Third Point, Elliott Management, and Argyle Street. Shareholder proposals also have risen to record levels. During June's annual general meeting season, 42 companies received shareholder proposals, the highest level ever recorded, according to IR Japan. In the first six months of 2018, the number of Asian companies engaged rose by 25% compared to the first half of 2017. Activists have been particularly noticeable in Japan following the introduction in 2017 of guidelines that ask shareholders to disclose their votes on proxy proposals. In June, Japan's Corporate Governance Code was revised to urge companies to disclose policies on reducing cross-shareholdings as well as to enhance board structure and consider the cost of capital in business plans. These changes have presented opportunities for activists looking to exploit low valuations of under-managed companies. Oasis Management is at the forefront of the activist movement in Japan with three proxy fights recorded in the first six months of 2018, according to Activist Insight.

Publicly held companies with headquarters in California are scrambling to recruit women for seats on their corporate boards. The state recently passed a law that requires companies to have at least one female board member by the end of next year, and some firms with one female director will need to add one or two more by 2021. About 16% of the 459 publicly held companies in the Russell 3000 Index are fully compliant with the law, according to Equilar, a research firm that tracks data on executives and boards. This figure includes companies that have five board members and at least two female directors, and companies that have six or more board members and at least three female directors. When it comes to the technology industry, just 13% of the sector's firms in the index are in full compliance with the law today. The law also puts pressure on startups that are looking to go public. There are 90 startups based in the state with valuations of $1 billion or more, but 59 did not have any women on their boards as of Oct. 15, according to data from PitchBook.

Institutional Shareholder Services (ISS) is defending its business model, noting that its work is crucial to ensuring investors have a voice in corporate governance issues. "Proxy advisers have become a surrogate for shareholders themselves in the debate regarding what kind of voice investors should have in the companies they own," ISS said in written comments submitted to the Securities and Exchange Commission in advance of the agency's Nov. 15 roundtable on the role of the firms and how they should be regulated. Critics argue ISS and Glass Lewis publish reports with misleading or false information without notice, giving companies little time to make a competing argument to shareholders. They also say that large passive investors such as BlackRock (BLK) or Vanguard blindly follow their voting recommendations, thereby further enhancing the influence of proxy advisers. ISS clients are "sophisticated institutional investors who are free to follow our recommendations or not," the firm said in its comments. "ISS provides institutional investors with critical assistance in analyzing and synthesizing an enormous volume of information in a short period of time, thereby giving investors a meaningful voice in corporate governance while maximizing the efficient use of limited manager resources." Institutional investors frequently follow the recommendations because they are "tailored to their own views on corporate governance, not because they follow our advice without thought or intention," ISS noted.

Elliott Management's gamble on Telecom Italia (TI) has been rocky, as a fight for control of the Italian telecommunications company with the No. 1 shareholder continues to escalate. Media conglomerate Vivendi has been battling Elliott ever since the hedge fund disclosed a stake in March. Telecom Italia's shares, meanwhile, continue to plummet after the company wrote down goodwill by €2 billion ($2.28 billion) in its third-quarter results. Elliott won a rare European proxy battle against Vivendi in May, replacing a Telecom Italia board with its own candidates. The victory so far has been costly: Telecom Italia stock is down about 41% since the vote. The company blamed Thursday's goodwill write-down on competition, tougher regulations, and higher interest rates. But Telecom Italia's problems are also self-inflicted. Behind-the-scenes battles between CEO Amos Genish, who was appointed by Vivendi, and the Elliott-installed board over strategy are likely alienating other investors. The goodwill write-down seems to have been pushed by Elliott and opposed by Vivendi. Things might just improve next year, however. Elliott in April hedged 56% of its stake with options. These have limited its losses so far, but expire between February and June. At that point the hedge fund will have an even bigger incentive to improve Telecom Italia's rock-bottom valuation. Ending the feud with Vivendi will be an important start.

Mandating board gender diversity through legislation is costly for shareholders, according to new research from Anil Shivdasani, the Wells Fargo Distinguished Professor of Finance at the University of North Carolina Kenan-Flagler Business School, and colleagues. When the signing of California Senate Bill 826 mandating female board representation was announced on Sept. 30, companies headquartered in the state experienced a statistically significant abnormal return of -1.58%. Examining the pre-legislation variation in board composition and the differing thresholds on female representation mandated by the law as points of comparison, the researchers were able to show that the decline in shareholder wealth effects is related to the requirements for female director additions. Announcement returns were more negative for companies for which the legislation is more binding, and firms with a greater shortfall of female directors experienced sharper declines in shareholder wealth than firms closer to the legislative requirements. The costs of mandated female board membership arise from supply-side constraints on the pool of female board candidates. The researchers also argue that companies with weak corporate governance or low profitability are more likely to experience the negative wealth effects associated with the law. The findings suggest that the regulatory mandates may not be enough to create shareholder value in firms.

The Middle East and North Africa region today has more fertile ground for shareholder activism than it did in the early 2000s. Interest in corporate governance, the performance of securities markets, and public listings of large companies is rising in the countries of the Gulf Cooperation Council (GCC). Several market players believe GCC countries would benefit greatly from shareholder activism, but the U.S. or European models may have to be adapted for the legal and cultural environment of the region, writes Nicole Purin, a legal and financial expert based in the United Arab Emirates. Most listed companies in the GCC are nano (EUR<50m) and micro cap (EUR 50-300m). There is considerable potential to unlock big share price gains in these companies because they are less well researched by analysts and are less likely to follow corporate best practices. The companies are unlikely to have the resources needed to fend off an activist campaign. Auditors that scrutinize their corporate books are often too close to management. Shareholder activism that is constructive and proactive with extensive dialogue with management—which could help companies operate more transparently and cost-effectively—would benefit the GCC, according to Purin.

Hong Kong legislator Abraham Shek sits on the boards of 16 public companies and two real estate investment trusts, but in an interview rejected any suggestion that this could leave him over-extended. “Some people are very efficient in reading documents,” he said. Hong Kong Exchanges & Clearing Ltd., which is under pressure to improve board oversight after a spate of corporate scandals, is attempting to address overboarding. “It's a concern when we see someone on 10 or 11 boards,” said Pru Bennett, BlackRock Inc.'s managing director and head of investment stewardship for Asia Pacific. Independent directors “are really our representatives on the board and we need them to have the time and capacity to contribute and represent minority shareholders.” Hong Kong has 113 companies with a director who serves on more than six boards, a Bloomberg News analysis showed. Beginning in January, Hong Kong's stock exchange will require companies to explain why any new directors already serving on six other corporate boards will have time to represent the interests of shareholders. Critics say the overboarding problem also contributes to the lack of gender diversity. “There are so many candidates out there, why keep on going to the same people?” said Fern Ngai, CEO of Community Business, a Hong Kong non-profit promoting inclusive business practices. “Many companies just use their circle of friends—the old boys' network—to find new board members.”