4/29/2029

Shareholder Activism in Asia Drives Global Total to Record High

Nikkei Asia (04/29/29) Shikata, Masayuki

Activist shareholders had their busiest year on record in 2024, with the Asia-Pacific region making up a fifth of campaigns worldwide, pushing some companies higher in the stock market and spurring others to consider going private. The worldwide tally of activist campaigns rose by six to 258, up by half from three years earlier, according to data from financial advisory Lazard. Campaigns in the Asia-Pacific tripled over that period to 57, growing about 30% on the year. Japan accounted for more than 60% of the regional total with 37, an all-time high. Activity is picking up this year as well in the run-up to general shareholders meetings in June. South Korea saw 14 campaigns, a jump of 10 from 2023. Critics say South Korean conglomerates are often controlled by minority investors that care too little about other shareholders. Australia and Hong Kong saw increases of one activist campaign each. North America made up half the global total, down from 60% in 2022 and 85% in 2014. Europe had 62 campaigns last year. The upswing in Japan has been fueled by the push for corporate governance reform since 2013 and the Tokyo Stock Exchange's 2023 call for companies to be more mindful of their share prices. The bourse has encouraged corporations to focus less on share buybacks and dividends than on steps for long-term growth, such as capital spending and the sale of unprofitable businesses. Demands for capital allocation to improve return on investment accounted for 51% of activist activity in Japan last year, significantly higher than the five-year average of 32%. U.S.-based Dalton Investments called on Japanese snack maker Ezaki Glico (2206) to amend its articles of incorporation to allow shareholder returns to be decided by investors as well, not just the board of directors. Though the proposal was rejected, it won more than 40% support, and Glico itself put forward a similar measure that was approved at the following general shareholders meeting in March. U.K.-based Palliser Capital took a stake last year in developer Tokyo Tatemono (8804) and argued that more efficient use of its capital, such as selling a cross-held stake in peer Hulic, would boost corporate value. Activist investors are increasingly seeking to lock in unrealized gains from rising land prices, reaping quick profits from property sales that can go toward dividends. Companies in the Tokyo Stock Exchange's broad Topix index had 25.88 trillion yen ($181 billion at current rates) in unrealized gains on property holdings at the end of March 2024, up about 20% from four years earlier. After buying into Mitsui Fudosan (8801) in 2024, U.S.-based Elliott Investment Management this year took a stake in Sumitomo Realty & Development (8830) and is expected to push for the developer to sell real estate holdings. This month, Dalton sent a letter to Fuji Media Holdings (4676), parent of Fuji Television, calling for it to spin off its real estate business and replace its board of directors. Activist campaigns have sparked share price rallies at some companies. Shares of elevator maker Fujitec (6406) were up roughly 80% from March 2023, when it dismissed Takakazu Uchiyama -- a member of the founding family -- as chairman under pressure from Oasis Management. The rise in demands from activists "creates a sense of tension among management, including at companies that don't receive such proposals," said Masatoshi Kikuchi, chief equity strategist at Mizuho Securities. Previously tight cross-shareholdings are being unwound, and reasonable proposals from minority investors are more likely to garner support from foreign shareholders. Some companies are going private to shield themselves from perceived pressure. Investments by buyout funds targeting mature companies in the Asia-Pacific were the highest in three years in 2024, according to Deloitte Touche Tohmatsu. Toyota Industries (6201) is considering going this route after facing pressure from investment funds last year to take steps such as dissolving a parent-child listing with a subsidiary and buying back more shares. Toyota Industries holds a 9% stake in Toyota Motor (7203). The automaker "may have proposed having [Toyota Industries] go private as a precautionary measure," said a source at an investment bank.

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9/26/2025

HanesBrands Considered Offers in 2020 to Sell Company; Activist Investor Pushed for Gildan as Buyer

Winston-Salem Journal (09/26/25) Craver, Richard

HanesBrands Inc.'s (HBI) board of directors considered two avenues for selling the struggling Winston-Salem basic-apparel manufacturer well before accepting Gildan Activewear Inc.'s (GIL) $4.4 billion in August. One was to an unidentified competitor, and the other featured potentially being taken private by an acquirer. That's according to a narrative Gildan disclosed last week in a lengthy SEC filing that presented its case for buying HanesBrands to shareholders of both manufacturers. The manufacturers said the sale could close by the end of the year or early 2026. The deal requires U.S. and Canadian regulatory approval and shareholder approval. HanesBrands shareholders would own 19.9% of the combined company in a deal representing 87% Gildan stock and 13% cash. The merger agreement also describes — and confirms — in greater detail the pivotal role of an activist hedge fund, Barington Capital Group LP., played in urging the HanesBrands board to sell. Separately, Gildan said last week it plans to conduct a private offering of $1.2 billion of unsecured notes to help pay for the deal. A continuous self-evaluation/restructuring initiative was launched in November 2020 with the hiring of former Walmart executive Stephen Bratspies as HanesBrands' third chief executive since its spinoff. The narrative noted HanesBrands received in November 2022 an unsolicited, non-binding indication of interest from an unidentified apparel competitor. About eight months of due diligence by both parties, the unidentifed company withdrew in June 2023 its offer of $6 a share, citing HanesBrands' "high levels of debt would burden the combined business." At that time, HanesBrands' shares were in a range of $4.26 to $4.62 a share. While HanesBrands was considering the competitor's offer, it began due diligence in May 2023 with a company willing to pay between $6.50 and $7.50 a share in a proposal that could have taken HanesBrands private. However, Hanesbrands’ "engagement with Party B did not advance beyond preliminary due diligence discussions." About two months after the due diligence negotiations ended, Barington began its investment in HanesBrands in August 2023 with the goal of forcing Bratspies and HanesBrands' directors into swift action to boost the manufacturer’s sagging share price. Barington chairman James Mitarotonda announced the firm's initial HanesBrands stock ownership stake with a salvo in the form of a letter to its board. “We invested in Hanesbrands because we believe in its recognized portfolio of value brands, strong distribution capabilities and unique vertically integrated operating model," he wrote. "However, the company’s poor execution and performance under current leadership has destroyed substantial shareholder value and left the company in a precarious position. In order to reverse Hanesbrands’ rapidly declining share price, we believe the company must immediately focus on cash generation and debt reduction while also considering new management and directors to implement these performance enhancing initiatives." By November 2023, HanesBrands agreed to expand its board temporarily by adding three Barington representatives as members. In exchange, Barington has agreed to “to customary standstill, voting and other provisions,” as well as “provide advisory services ... from time to time with respect to the company’s business, operations, strategic and financial matters, corporate governance, and the composition of the board.” As HanesBrands' board and executive management were being engaged by Barington, it became public in early 2025 that Gildan’s board and chief executive Glenn Chamandy — as part of resolving its own divisive shareholder challenges — was considering pursuing large acquisitions that could involve HanesBrands. The narrative lists that on March 3, HanesBrands chairman Bill Simon initiated talks through financial advisers with Rhodri Harries, Gildan’s chief administrative officer, about Gildan's interest in buying HanesBrands. In early April, the parties exchanged preliminary drafts of a confidentiality and standstill agreement. However, talks were put on hold temporarily as both manufacturers assessed the potential impact of Trump administration tariffs on their sales and production costs. In May, Mitarotonda sent a confidential letter to HanesBrands' board advising them to pursue a sale to Gildan. Shortly after receiving the letter, HanesBrands' board was told Gildan had resumed its interest in conducting initial due diligence. The board told management to negotiate a customary confidentiality agreement with Gildan "with the understanding that a premium to the current stock price would be an essential component of the Hanesbrands board’s willingness to consider a potential transaction." On June 8, HanesBrands' board rejected Gildan's first offer. Gildan revised its offer to provide 0.102 Gildan common shares and 60 cents in cash for each share of Hanesbrands common stock. Although that offer represented a 14.4% premium over the HanesBrands' share price, it also was rejected. HanesBrands' board countered by requesting 0.105 Gildan common shares and $1.10 in cash for each HanesBrands share. Gildan amended its offer on July 15 to 0.102 Gildan common shares and 80 cents in cash for each HanesBrands share, saying it was its "best offer." Gildan wanted HanesBrands to provide a termination fee of between $55 million and $80 million if it withdrew from an agreement. They settled on $67.5 million. Media reports surfaced on Aug. 12 that the manufacturers were in advanced discussions. Those reports compelled Chamandy to contact Bratspies "emphasizing Gildan’s desire to finalize and announce the transaction promptly," as well as "expressing support for the Hanesbrands board’s request regarding Bratspies’ continued employment with Hanesbrands" for a limited time after the closing of the deal. The manufacturers signed the proposed purchase agreement on Aug. 12 and announced the deal on Aug. 13. The deal is valued at $2.2 billion in Gildan stock at $6 a share, and another $2.2 billion in acquiring HanesBrands corporate debt and some underfunded pension liabilities. HanesBrands' board pitches the potential sale as a combined company being "better positioned to adapt to the changing market, such as consumer sentiment and retailer dynamics, including as a result of global trade policies and intensified retail dynamics affecting Hanesbrands’ industry, all of which were factors expected to impact Hanesbrands’ business and future financial performance." Gildan chief executive Glenn Chamandy said the proposed acquisition “is a historic moment in Gildan’s journey as we look to join forces with HanesBrands.”

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9/23/2025

Shift of Tactics in German Takeovers Thwarts Hedge Fund ‘Back End Trade’

Financial Times (09/23/25) Levingston, Ivan; Müller, Florian

Companies and private equity groups pursuing takeovers of German businesses are shifting tactics to circumvent a popular trade pioneered by the likes of Elliott Management. Hedge funds led by Elliott started making use of German corporate laws’ protections for minority investors more than a decade ago by taking stakes in listed companies that were set to be acquired with the aim of then seeking higher prices for their shares. The so-called back-end trade complicated planned takeovers because the hedge fund investors would use legal proceedings to seek higher values for their shareholdings. However, bankers and other advisers say that in the past couple of years the trade has evolved, with acquirers adopting tactics that have either delayed such situations or necessitated investors taking larger stakes. “The German back-end trade is constantly evolving with fewer investors being able to play it,” said Thomas Schweppe, a former Goldman Sachs banker who now runs Frankfurt-based advisory firm 7Square. Another senior European banker added that the trade was “a real hurdle to M&A." A broader slowdown in takeovers and shifting macroeconomic conditions has also made it less attractive, according to people familiar with the trade. One of the most prominent examples of the trade was in 2013, when UK telecoms operator Vodafone (VOD) announced a €7.7bn acquisition of Kabel Deutschland. After the initial agreement, investors including Elliott amassed a 14% stake in Kabel Deutschland and argued that Vodafone’s offer undervalued the company. While Vodafone eventually took control of Kabel Deutschland by securing about 77% of shares, the group failed to cross the 90% threshold that would have allowed it to squeeze out investors who did not back the offer. Elliott and other holdouts seized on German protections for minority investors that do not accept the offer, and then spent years pursuing litigation over whether the acquisition was fairly priced. Eventually, the sides settled, with Vodafone paying remaining investors up to €2.1bn to buy them out. Similar situations have since played out at other takeover targets in Germany, including Deutsche Wohnen (DWNI), Stada, Vantage Towers, and Hella (HLE). These dynamics have made German takeovers less attractive, according to market participants. A 2022 survey of 32 listed companies by Deutsches Aktieninstitut and law firm White & Case found that public takeovers in Germany increasingly faced structural and tactical obstacles, including hedge fund maneuvering, with more than half of respondents citing them as material impediments to deals. “Acquiring companies have gone ‘this is just ridiculous’, and thrown the towel,” said Mark Kelly, chief executive of London-headquartered MKP Advisors. “The biggest issue is you don’t get much big German M&A anymore,” except in cases where buyers are willing to pay an outsized premium. Would-be acquirers are making tactical shifts in order to ease their path to a deal. The evolving tactics are evident from a deal this July, when Chinese ecommerce group JD.com (9618) made a €2.2bn bid for German electronics retailer Ceconomy (CEC) with a structure designed to pre-empt activist hedge funds. JD secured irrevocable commitments from key shareholders representing more than 31% of voting rights, along with options for a further 25% — giving the buyer effective control from the outset. The group then announced that its takeover offer for the remaining shares would not be subject to a minimum acceptance threshold, and refrained from setting a timeline for a potential delisting. “Of course, those were key points directed at the hedge funds,” said a person familiar with the transaction.

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9/23/2025

Opinion: Activists Ride to Rescue Minority Shareholders Hit by Japan's Buyout Surge

Nikkei Asia (09/23/25) Halse, Jamie

Jamie Halse, the founder and managing director of Senjin Capital, Australia's first Japan-focused activist fund manager, notes in this commentary that a surge in M&A activity is driving Japan's stock indices to new highs. Within this trend, management buyouts (MBOs) and other insider-led deals have drawn particular scrutiny, sparking controversy among investors and regulators. MBOs are increasing to record levels for three key reasons, according to Halse. First, the nation's corporate governance reform and increasingly engaged shareholders are making life less comfortable for managers of underperforming listed companies. Second, the stigma associated with a management team or major shareholder choosing to delist its company is dissipating. Third, the economics of such transactions for the insiders are phenomenal. "There is an inherent conflict with shareholder interests where a management team agrees a buyout deal in which it stands to participate in the post-deal economics," says Halse. "The financial incentive is to push the deal through while offering as small a premium as possible. Theoretically, shareholders should refuse to tender their shares into an unsatisfactory deal. Theory breaks down, however, when investors are faced with a precipitous drop in the trading price once the deal premium disappears." Halse points out that this conflict of interest exists in every market, but in ones like the U.S., the U.K., and Australia, the courts have ruled that directors owe a duty to shareholders to pursue the best deal price. If a credible higher offer emerges, directors are effectively obliged to allow the offeror to do the due diligence required to obtain bank financing. Comprehensive discovery in court proceedings means aggrieved shareholders can cite any evidence of malfeasance. No such duty to shareholders or comprehensive discovery process exists in Japan. Courts defer heavily to directors' business judgment. Due diligence access is unlikely to be granted, so higher offers generally do not emerge. There have been some exceptions. In 2021, activist Yoshiaki Murakami completed a successful hostile bid for Japan Asia Group, paying double what the management's partner Carlyle Group had offered. Similarly, Yamauchi No.10, the family office of Nintendo's founding family, prevented a favorably priced agreed deal between Toyo Construction (1890) and Infroneer Holdings (5076), by announcing that it had made a higher offer that was being ignored by Toyo's management. Both of these cases, however, involved principal capital rather than activist funds. Last week, however, activist fund Effissimo Capital Management, launched a hostile tender offer for all the outstanding shares of car care products maker Soft99 (4464), derailing a proposed MBO by bidding at a 60% premium to the MBO price, which itself was a 55% premium to the pre-bid stock price. "Our back-of-the-envelope analysis suggests that as a result of the deal, related entities to Soft99's president could theoretically have received cash distributions amounting to almost double the value of their 31.4% stake in the company, valued at the MBO bid price, while gaining control of 100% of the company." states Halse. This is based on the company's large cash balance and holdings of real estate and other investments, and assumes typical LBO debt usage. Effissimo and other activist funds have previously bought large positions or commenced partial tender offers after a deal was announced, in an attempt to push for an increased price or later sue for appraisal rights where the process was particularly egregious. However, this is the first instance of an activist fund manager launching a hostile bid for all of the target's outstanding shares when an MBO was in process. Managers are generally precluded from taking such actions for a number of reasons. Their investor base is generally seeking public equity exposure, and do not want to or cannot hold non-public equity positions. If this hurdle can be overcome, a manager pursuing such actions would still face many tough questions from investors around "style drift," and loss of focus on the core strategy. Additionally, most activist fund managers are not set up from an investment team or operations standpoint to go down this path. Finally, a hostile tender must be cash-funded — whether using the fund's cash, or borrowing offshore against fund assets — at least until the deal is complete and control is assured. Japanese banks will not provide financing for hostile deals due to reputation risk and lack of due diligence access. Most activists do not have sufficient capacity to fund such deals. Effissimo, reported to be managing $13.6 billion in 2023 (per Capital AUM.com), is not bound by the latter constraint, at least in the case of smaller-size deals. How it is dealing with the other issues is information the notoriously secretive manager will likely keep to itself. For larger deals, the issue remains. The high-profile recent proposed 4.7-trillion-yen (about $32 billion) privatization of Toyota Industries (TICO) is a case in point. Minimal transparency was provided as to how the takeover price of 16,400 yen per share was reached. This left investors irate, as when TICO's extensive holdings of Toyota Group company shares are considered, the deal appears to place little value on the world-leading automobile compressor and forklift businesses. The government and the Tokyo Stock Exchange have tried to improve outcomes for non-insider shareholders in conflicted deals. The Ministry of Economy, Trade and Industry's 2019 Fair M&A Guidelines and 2023 Takeover Guidelines have improved matters and proved influential on board processes and court decisions. The TSE, since July, requires detailed disclosure of how the special committee of directors determined the fairness of the relevant deal. "The TSE does not have a large stick to enforce these requirements, but to not comply would send a message that judicial ears may not be able to ignore, and the knowledge that disclosure will be required may force better behavior by company boards," concludes Halse. "It will take time to observe the impact of these changes, but in the meantime, it is the activists riding to the rescue for minority shareholders."

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9/23/2025

ESG Resolutions Drop 40% in 2025 Proxy Season, Morningstar Reports

Pensions & Investments (09/23/25) Marchant, Christopher

Changes in the Securities and Exchange Commission's (SEC) shareholder resolution guidance have led to a 40% decrease in environmental and social resolutions for the 2025 proxy year, according to a report published by Morningstar. Morningstar’s “2025 ESG Shareholder Voting Review" showed that there were only 30 significant environmental and social resolutions in the 2025 proxy year ending June 30, (defined as those with at least 30% support from independent shareholders). That was in sharp contrast to the more than one hundred resolutions in each of the prior five years for U.S. listed companies. The SEC introduced guidance in February permitting companies to exclude a wider range of shareholder resolutions from proxy ballots. Subsequently, the number of proposals voted on by shareholders in the U.S. has fallen by 22% year on year, to 502 in the 2025 proxy year (ended June 30) from 647 in 2024. Vanguard Group funds did not support any environmental or social-related proposals at U.S. portfolio companies during the 2025 proxy year. Six major U.S. asset managers (BlackRock, State Street, Vanguard, J.P. Morgan, Invesco, and Dimensional) showed an average support of 18% for significant ESG resolutions - a modest rise from 17% in 2024 but far below the 46% peak in 2021. Across geographies, support for standard ESG resolutions (not including those by “anti-ESG” filers) has remained steady for three years at around 26–27%. “Following this year’s proxy voting season, it’s clear the market is losing critical signals on sustainability factors many investors view as vital for long-term investment decisions,” said Lindsey Stewart, director of institutional investor content at Morningstar, in the report. The proportion of environmental and social resolutions receiving less than 5% support also rose, to 27% from 8% over five years, according to the Morningstar report.

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9/21/2025

Opinion: Congratulations, Lachlan Murdoch. You Won a Fading Empire and a Pile of Debt.

New York Times (09/21/25) Marr, Merissa

Lachlan Murdoch is finally sitting comfortably on the familial throne as successor to Rupert Murdoch as head of News Corp (NWSA). But, according to this opinion piece, as the dust settles, there is an unmistakable sense of unease about what lies ahead. On the surface, everyone seemed a winner from the hard-fought recent deal that settled the Murdoch family business. Rupert Murdoch installed his like-minded, eldest son, Lachlan, as heir, thus preserving what he has called the “protector of the conservative voice in the English-speaking world.” The more liberal-minded siblings James, Elisabeth and Prudence each walked away with a $1.1 billion windfall from an empire whose politics they often found distasteful. Lachlan Murdoch, as head of the new family holding, also had to agree to something his father always fought to avoid: watering down the family’s control of Fox and News Corp. In 2019, Rupert Murdoch sold off the family’s 21st Century Fox entertainment assets to Disney (DIS). The remaining kingdom — Fox Corporation, which owns the namesake news channel, and News Corp, owner of The Wall Street Journal and HarperCollins — isn’t as powerful as the company Murdoch famously put his stamp on and is fast becoming overshadowed by empire-building rivals. Lachlan now finds himself nursing a $1 billion debt pile. That debt is backed by the stock owned by the new family trust. And while those businesses, for now, make a lot of money, the new structure means any significant fall in the stock price could create problems. Perhaps more remarkable is the compromise Lachlan made on his ownership stakes. The complex web of transactions that constitute the deal means the new Murdoch trust has less control over the companies because of the stock sales needed to pay the three siblings. The new family holding, which also counts Rupert Murdoch’s two youngest children, Grace and Chloe, as beneficiaries, has 36% of Fox’s voting shares and 33% of News Corp’s, versus 43% and 41% previously. If the value of the family’s holdings were bolstered by the Murdochs’ effective control of the company, this deal chipped away some of that. Keeping shareholders happy will be a more pressing priority now that the result of a proxy fight is less assured, especially if the Murdoch companies come under further activist engagement. The investor Starboard Value pushed last year to end News Corp’s dual-class structure, a common mechanism for founders to control a company with a far-from-controlling economic stake. In 2022, Irenic Capital Management lobbied against Rupert Murdoch’s plans to combine Fox and News Corp, a plan he subsequently ditched.

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9/19/2025

BlackRock, Vanguard Scale Back Company Talks as New Guidance Bites

Reuters (09/19/25) Kerber, Ross

The world's two biggest asset managers sharply scaled back the number of meetings held with company bosses this year, disclosures show, as new guidance made it harder to discuss topics like climate change and diversity. The shifts by BlackRock (BLK) and Vanguard came in the wake of new guidance in February from the SEC, led by a pick of U.S. President Donald Trump, Mark Uyeda, and could leave executives with less investor input on strategy or facing surprise critical votes at shareholder meetings. The directives were among a series of recent Republican efforts to diminish corporate actions on everything from company climate disclosures to the role of proxy advisors. Tallies in new disclosures show declines of 28% and 44% for BlackRock and Vanguard, respectively, compared to their meetings in year-ago periods. Several consultants said the declines show how the guidance has quieted talks between shareholders and managers ahead of corporate elections on matters beyond politically contentious issues like climate change, such as directorships or executive pay. "The new guidance, whether intentional or not, created a chilling effect on the largest investors," said Peter da Silva Vint, a former BlackRock executive now with corporate adviser Jasper Street Partners. Often fund managers come to meetings in "listen-only mode," da Silva Vint said, which makes it harder for company leaders to tell how fund managers might vote. While climate and social questions have taken up less bandwidth at corporate annual meetings lately, items on corporate governance continue to win support. Both Vanguard and BlackRock ended support for nearly all climate and social resolutions in previous years, a pattern that continued in 2025. The new SEC guidance tells managers to file more complex, expensive forms to report major holdings if they exert "pressure on management" such as tying director votes to whether a company has a staggered board or undertakes certain environmental policies. The reporting requirement could also be triggered if the fund firm "states or implies" it will not support directors unless a company makes changes in line with a fund's voting policy. The shift mainly affected BlackRock and Vanguard, whose combined $22 trillion means both firms often own more than 5% of stock issuers, the filing threshold. The two firms paused and then resumed contact while taking stock of the new guidance. Now the fund firms' reports show a changed pattern. BlackRock's stewardship team met with companies worldwide 2,584 times during the 12 months ended June 30, a drop of 28% from the year-earlier period. Most of the proxy-related engagements would have happened after the Feb. 11 SEC guidance, said Paul Schulman, senior managing director for proxy solicitor Sodali. He called the guidance "100% the cause" of the meeting declines. Schulman said even when meetings occur, stewardship teams say less about how they plan to cast their proxy votes. Top investment firms "have always been hesitant to disclose to the company how they’re going to vote. Now they're hesitant to signal their thinking on the issues," Schulman said. BlackRock has not given a quarterly count of its meetings. In its recent report, it said at the meetings its stewardship team "listened to company directors and executives to understand how they are overseeing material business risks and opportunities," and that it may convey concerns through its AGM votes. Last year's report paints BlackRock's stewardship team as being more outspoken. Where it had concerns, the fund manager said at the time, "we typically raise these through dialogue with board members and management teams first." Asked for comment, a BlackRock representative noted its past statement that "does not use engagement as a way to control publicly traded companies." For Vanguard, an Aug. 21 report showed the Pennsylvania firm met with 356 companies worldwide from April through June this year, down 44% from the 640 in the same period in 2024. Vanguard's report didn't address the decline, and a representative declined to comment. A Vanguard representative said the company "does not, and never has, used engagements with companies to signal our voting intentions." Paul Washington, chief executive of the Society for Corporate Governance, which represents corporate secretaries and others, said the new guidance limits the value of shareholder talks. "This season companies found it harder to know what their major investors were thinking," he said. In a survey, more than a quarter of public company society members said they found a "more challenging engagement environment" this year with companies having trouble maintaining relationships with investors or exploring their views.

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9/19/2025

SEC Will Move to Overhaul Investor Disclosures, Atkins Says

Bloomberg (09/19/25) Beyoud, Lydia

The Securities and Exchange Commission (SEC) will move forward with plans to overhaul investor disclosure rules for publicly-traded companies, agency Chairman Paul Atkins said Friday. The announcement comes the same week that President Donald Trump issued a social media post suggesting the SEC should move to semi-annual, rather than quarterly reporting. “It’s a good time to look at the whole panoply of ways that people get information, how it’s disseminated and what’s fit for purpose,” Atkins said during an interview on CNBC. He noted that many investors get more information from earnings calls rather than the quarterly reports. Atkins echoed Trump’s criticism that quarterly reports have driven corporate executives and management to focus too much on short-term returns. But the long-time Washington consultant and power player has been a perennial critic of the “overload” of disclosures both for investors and the companies that have to provide them. Atkins has already made clear that he plans to reduce disclosures on executive compensation. Other disclosures, such as those related to conflict minerals, could also be targeted for fewer releases or even elimination. During the CNBC interview, Atkins said the “huge cost” of complying with regulatory requirements is one of the leading reasons companies remain private. There have been tensions between investors seeking information and publicly traded companies seeking to shed what some see as unnecessary or overly burdensome reporting requirements ever since. Many companies already produce quarterly data for internal oversight, so reducing public-facing reports may only modestly reduce” compliance costs, according to Andrew Jones, principal researcher at the Conference Board, a think tank whose members include hundreds of public and privately traded companies. “Limiting disclosures also introduces risks related to reduced transparency and heightened market uncertainty,” Jones said in an emailed statement.

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