It turns out that a convincing defense by a Board of Directors and a strong deep Board can have the upper hand when it comes to proxy contests. GPP reviewed a series of Harvard Governance Blog memos written by our advisory community friends on this year’s proxy season, and deal participants have come to some interesting conclusions: Management and incumbent Boards seem to have prevailed this cycle.

The big wins, of course, were the clean sweeps at The Walt Disney Co. and Crown Castle Inc. and a solid victory at Norfolk Southern, and an increasing understanding that dissidents have their own work cut out for them when attacking individual directors using the universal proxy.

Activists and their advisors believe being able to distinguish the company nominees from the dissident nominees has given activists “the ability to craft their campaigns to surgically target directors they view as most vulnerable,” points out Andrew Freedman of Olshan, which represents activists.

True enough, but that means dissidents have to come up with strong enough dissident candidates to match the directors targeted, and dissidents have lost when their director nominees were not up to snuff as compared to company nominees. 

“Perhaps the most notable trend emerging from proxy contests in 2024 is the dearth of dissident nominees elected. Seven of the eight proxy contests that have gone to a vote in the US this year have resulted in management clean sweeps,” wrote Art Crozier, Gabby Wolf and Jonathan Kovacs at Innisfree M&A. 

For the most part, the much-feared ISS and Glass Lewis didn’t seem to sway enough voters to have much influence. “Management nominees found success even when ISS and/or Glass Lewis did not recommend in favor of all management nominees,” Innisfree noted.

And while activism has increased, it does not appear that UPC has caused an increase in proxy fights in the United States, wrote Doug Schnell and Sebastian Alsheimer at Wilson Sonsini. “There does not appear to be a correlation between the use of UPC and the average number of seats won in the United States,” they wrote.

Have a great weekend,

GPP team 

The Wall Street Journal: Activist Starboard Value Has Stake in Autodesk

Lauren Thomas reports that Starboard revealed a stake in Autodesk and sued the company to reopen its board nomination window, claiming it “misled” investors following an internal investigation into its accounting practices. Read More

The New York Times: Exxon Suit Over Activist Investor’s Climate Proposal Is Dismissed

A Texas federal judge struck down Exxon’s lawsuit against Arjuna Capital after the activist fund withdrew proposals calling for cuts to Exxon’s greenhouse gas emissions and vowed not to submit similar proposals. Given Arjuna’s rescinded proposal, Judge Mark Pittman ruled Exxon’s claim was moot, writes Sydney Ember. Read More

M&A

The Wall Street Journal: Honeywell Strikes $2 Billion Deal for Defense Business

The Charlotte-based conglomerate will expand its aerospace business as military spending continues unabated, picking off defense technology company CAES Systems from private equity firm Advent International for just north of $2B. Read More

Axios: Hildebrand Pulls Bid for Vista Outdoor Ammo Unit

The eponymous private equity firm run by oil magnate Jeff Hildebrand withdrew its bid to buy Vista Outdoor’s ammunition unit due to a legal conflict overlapping MNC Capital’s initial pursuit of a deal. Read More

CORPORATE GOVERNANCE

Delaware Call: Dissent in House Judiciary Over Controversial Corporate Amendments

Delaware Senate Bill 313 – the legislation which includes hotly debated amendments to its corporate law – passed through the House Judiciary Committee this week despite continued opposition to the potential impacts and perceived rushed pace of review. Said Representative Franklin Cooke: “I am going to vote to release the bill so that my other colleagues can hear this and know exactly how complicated this is, because this is very complicated and something that I don’t appreciate on June 18th.”

Read More

The Information: OpenAI CEO Says Company Could Become Benefit Corporation Akin to Rivals Anthropic, xAI

The potential change in governance structure, which is being pushed by investors like Microsoft, would allow CEO Sam Altman to take a stake in the company and potentially pave the way for a future IPO. Read More

IPO

Financial Times: Permira’s Last-Minute Decision to Kill the Golden Goose IPO

After more than seven banks built out the sneaker maker’s oversubscribed IPO book, private equity owner Permira pulled the listing on Tuesday evening. Golden Goose was set to list in Milan. Read More

ESG

Harvard Law School Forum on Corporate Governance: The Expansion of ESG Beyond Proxy Voting

Glass Lewis’ Senior Editor Dimitri Zagoroff counters recent claims that institutional investors are retreating from ESG issues, positing that the approach to ESG has become more nuanced and identifying two factors impacting ESG voting: 1) 2021 SEC changes that have led to increasingly specific ESG proposals, which makes it difficult to reach consensus, and 2) preemptive engagement between asset managers and companies on ESG matters. Read More

FROM OUR DESK TO YOURS



I’m sure many a reader has been to San Sebástian in Northern Spain’s Basque country. Well, bring back those memories by going to Txikito in Chelsea, which has as an authentic Basque-inspired menu as any in New York City. Plenty of small plates and of course pintxos—we started with crab pintxos, amberjack, gem lettuce with bonito and foie gras. We then had morros (beef cheeks) and an amazing arroz meloso, a rice dish with tomato, uni, wild shrimp and mushroom. The wine list is fun and obviously Spanish from many regions. We had a delish albariño and also had fun trying their sherries. Add it to your hit list!

In midtown, GPPers braved the intense heat this week for our annual team scavenger hunt on Tuesday. Each team, led by one of our four interns, had one hour to earn as many points as possible by completing a set of challenges, including posing with the toy soldier guards at F.A.O. Schwarz, recreating the park bench scene from Forrest Gump and showing off the bling at the Diamond District. We then all met around the corner from our offices for wine and appetizers outside at our friends at Fresco By Scotto.  

PEOPLE MOVES

• David Zaslav hired former White House press secretary Robert Gibbs as Warner Bros. Discovery’s new communications chief. Read More
• Citigroup has named Ignacio Gutiérrez-Orrantia as CEO of Citibank Europe. Read More
• UBS hired Ananya Das from Guggenheim to lead its business services dealmaking group. Read More
• Solomon Partners hired veteran healthcare banker Whit Knier from Richmond-based Harris Williams. Read More

• June 24: Semafor Business Summit, New York
• June 25-26: Bloomberg Invest, New York