FINAL UPDATE: UPCs We Continue Tracking

As followers here figured out, one of our hobbies is tracking proxy contests under universal proxy card (UPC) with a voting outcome. We seek to understand how UPC affects actual shareholder votes in real BoD elections.

We last looked at this subject in May (below). Since then, the list of UPCs we track has changed even more, with situations dropping off due to settlements or withdrawals or concluding at the AGM. As for the latter, the news continued mostly bad for activists, with a couple of bright spots.

We saw four BoD elections in the past few weeks. Activists won BoD seats at only two companies, PRKA and LL. There, Focused Compounding and F9 each won all the seats they sought. At the other two, Arex won one seat out of seven at EHAB, and ZimCal won nothing at MFIN.

It's a good time to look back on the second year of UPC. Many contests we tracked since last autumn settled. This follows a pronounced trend in settling proxy contests instead of activists and companies taking their chances on a shareholder vote. This remains the most important consequence of UPC.

The table below lists all fifteen situations. It shows the company, activist, number of activist BoD seats sought/available/won, and date of the AGM.

Since September 2023, of the fifteen contests:

• In two, activists won all of the seats they sought
• In two others, activists won some of the seats
• In the other 11, activists won none of the seats.

The table below lists all fifteen situations. It shows the company, activist, number of activist BoD seats sought/available/won, and date of the AGM.

Until the PRKA and LL AGMs, the voting outcomes looked really bad for activists. At only one company, NSC, did an activist win any seats, and even there Ancora won only three out of the eight it sought. Since then, at only one other company, EHAB, did activists win anything, and Arex won only one seat out of the seven it sought.

We can't quite conclude anything about the four contests where activists won something. Three involved new activists, while the other involved long-time activist Ancora. Otherwise, they have little in common.

Among all fifteen, five (DIS-Trian, FBRX-Camac, NSC-Ancora, XPER-Rubric, PFBX-Stillwell) featured an experienced or well-known activist. Only Ancora won anything in its project, and even then fell short of its goals. The other ten include funds without any previous activist experience, former company executives returning as turnaround investors, and unconventional shareholders.

One last notable situation remains: MASI-Politan, where Politan seeks to add two more directors to the two activist candidates that won election a year ago. For now, MASI moved the AGM to September 2024.



As before, we welcome your questions, comments, updates, and corrections.

ANOTHER UPDATE: UPCs We Continue Tracking

We last looked at this subject in mid-April (below). Since then, the list of UPCs we follow has changed somewhat, with situations dropping off or concluding at the AGM. As for the latter, the news is mostly bad for activists, at least as concerns voting outcomes.

We saw five BoD elections in the past few weeks. Activists won BoD seats at only one company, NSC. Ancora nominees won three out of eight seats, on a BoD of 13 people. We'd call that partial success.

Since last autumn, we saw ten proxy contests with a voting outcome. Activists have won seats only at NSC. An eleventh occurred last week, where Rubric sought two seats at XPRI. While XPRI has not released the results, we expect incumbents to win both, seeing as all three US proxy advisors recommended clients vote for the company.

Seven situations dropped off as activists settled with companies or retreated from a proxy contest. We expect another eight in the next three months, based on announcements so far. Of course, some of these may settle, too.

We know of three contested elections with scheduled AGMs in the coming weeks. This includes the fascinating one at PRKA where podcasters and bloggers from Focused Compounding seek a majority of the BoD.

Some other AGMs will occur later in the summer or have not yet been scheduled. Politan seeks two more BoD seats at MASI after winning its first two in 2023, although MASI has not yet scheduled the AGM. And, after disrupting the DIS-Trian proxy contest, Blackwells seeks four out of eight BoD seats at long-time activist project BHR.

Early evidence suggests activists and companies continue to settle more proxy contests, and do so quickly. So, activists continue to lose BoD elections and gain BoD seats. Perhaps UPC serves to sort out the best and worst activist situations.

See our earlier post (below) for how we define "pending" to make it onto the list. The activist BoD seats figure shows the number of BoD seats the activist wants, the number available, and the number won (if the contest went to a vote).

As before, we welcome your questions, comments, updates, and corrections.

UPDATE: UPCs We Continue Tracking

We last looked at this subject in mid-February (below). DIS-Trian-Blackwells ended, leaving a long list of merely interesting situations to follow. A few proxy contests settled and a greater number began, so we track 19 pending contests here, as large a number as we've seen in early April in several years.

We update our list now to include the DIS-Trian-Blackwells outcome. Since last autumn, activists have taken five proxy contests through to a shareholder vote, winning a total of ... zero BoD seats. This includes two conventional ones with DIS-Trian-Blackwells (if one can call it conventional) and OPTT-Paragon, and a somewhat odd one with POL-Hammann, which we highlighted earlier (below).

The pending ones look a little more promising, to activists, than those five. They include large caps like M-Arkhouse, CCI-Boots, and NSC-Ancora. Politan seeks two more BoD seats at MASI, after winning its first two in 2023.

As for number of contests, 19 strikes us as quite a large number. In mid-April last year, we counted only eight contests pending for April, May, and June 2023. We expect activists to launch at least a few in the next several weeks, based on news accounts and Form 13D filings.

Of those 19, only four set AGM dates. The rest usually have an AGM in April, May, or June. We suspect at least a few of these companies will schedule AGMs a little later in 2024. They might delay from the usual timing to assess the situation and maybe even to try to round up support for incumbents.

The pending contests don't include ones that already began and ended, either through a settlement or abandonment. Four on the list in mid-February settled. A couple even began and settled since mid-February, including ELAN-Ancora. Earlier we included SBUX-SOC, which SOC ended a few weeks before the AGM when it appeared likely SBUX would prevail.

Activists seem to seek more BoD seats than before. Only four of the 19 want a single seat, while eight look for half or more of the available seats. We expected UPC to lead to this trend.

See our earlier post (below) for how we define "pending" to make it onto the list. The activist BoD seats figure shows the number of BoD seats the activist wants, the number available, and the number won (if the contest went to a vote).

As before, we welcome your questions, comments, updates, and corrections.

UPCs We Continue Tracking

We last looked at this subject in mid-December 2023. Since then, one proxy contest ended, while several others began. We now list 13 pending contests, plus a couple of others that took place in 2023. See our earlier post (below) for our explanation of how we put this list together.

Some comments about what we see:

• The significant ones are of course Trian-Blackwells-DIS and SOC-SBUX. We now have AGM dates for each.
• Hammann-POL went to a vote in January, where individual investor Jerold Hammann lost the election badly. Hammann evidently filed no proxy materials, only an exempt solicitation notice. We wonder how he could do this under UPC.
• Focused Compounding continues its project at PRKA, with its terrific open letters. The company has both a special and annual shareholder meeting scheduled, so Focused Compounding has notified the company of intent to nominate candidates at both.
• Paragon continues its proxy contest at OPTT, as the company has adjourned the AGM twice already, failing to gain a quorum, possibly because of Paragon. The vote is currently scheduled for the end of February.

One situation dropped from the list: Kellner-AIM, featuring a significant Delaware Chancery Court decision invalidating both elements of the AIM advance notice bylaw terms and the Kellner advance notice. So, no contested election.

It's both a little early and an awfully small sample to conclude this, but - it seems activists have nominated more candidates, as a percentage of available BoD seats, than in past years. We predicted this could happen under UPC.

As before, we welcome your questions, comments, updates, and corrections.

UPCs We're Already Tracking

You should recall we monitored UPCs closely last year, looking for interesting voting outcomes where UPC changed how shareholders actually elected directors.

We continue this effort here, with several announced proxy contests, and even a couple that took place since we last looked at this in August 2023.

We identify seven pending proxy contests. This means ones at US companies subject to SEC rules (including UPC, of course) with at least preliminary proxy materials filed with the SEC. We know of a number of others that activists have announced in the news media or in a Form 13D filing, or that news media have reported. We don't include them here, since we have the greatest interest in voting outcomes. We see a voting outcome only with proxy materials.

The seven include the first ESG-oriented proxy contest under UPC, where union representatives (SEIU, working through SOC) notified Starbucks of intent to nominate three candidates. It also includes the Trian-Disney contest, where Nelson Peltz indicated his intent to nominate a former DIS CFO and himself. The five others include two ongoing activist situations (Kellner-AIM and Driver-ASRV), and three newer ones. One (Kellner-AIM) should have a vote next week, while the other six will take place in 2024, as five of those don't have an announced AGM date yet.

We saw only two proxy contests with voting outcomes after August 1: Camac-FBRX and Sudbury-LFVN. In both, activists sought more than one seat, and shareholders supported only incumbents. Sudbury did come within a few thousand votes of electing one of their three nominees at LFVN, though.

As before, we welcome your questions, comments, updates, and corrections.