Shareholder Activism Shows No Signs of Slow Down, While GPP Joins Chorus of “Huzzah” in Cheering Evan Gershkovich’s Release | |
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The latest proxy season review from Diligent Market Intelligence confirms that the Paris Olympics is not the only place where records are being tested. In 2023, 981 companies were subject to activist campaigns globally which makes it the silver medalist behind 2019’s levels of shareholder activism. Diligent attributes some of the heightened levels of activity, especially early settlements with companies, to the introduction of the universal proxy card, but the debate continues whether the UPC in and of itself makes it easier for dissidents. Diligent’s survey of 250 U.S. company directors finds that 73% think the UPC has given activist investors excessive rights/advantages. As for whether everyday shareholders have excessive rights/advantages, 37% agree with that statement.
Activists are more often going for gold at large-cap companies, with over half of the demands being made to those valued $10 billion and up, the Diligent data show. Starbucks is navigating the balance beam between Elliott the activist on one side and Howard Schultz, the founder and sixth largest shareholder on the other. According to the Financial Times, Shultz is opposed to any settlement with Elliott, which has been pushing for change at the company and board representation. On Tuesday’s earnings call, Starbucks CEO Laxman Narasimhan said talks with Elliot were “constructive.”
On a separate note, GPP was thrilled to see the news that wrongfully detained Wall Street Journal reporter Evan Gershkovich, along with more than a dozen others jailed by the Kremlin, were freed as part of the largest East-West prisoner swap since the Cold War. We wish Evan and the other political prisoners the best as they transition back home to be reunited with their loved ones. As Emma Tucker, the editor-in-chief of The Journal wrote yesterday, “I am proud of how forcefully the WSJ newsroom and Dow Jones responded to the call of a colleague in extreme distress. Now we and Evan’s many friends in the media and elsewhere can celebrate his return to freedom.”
Have a great weekend, NY events below
GPP team
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Harvard Law School Forum on Corporate Governance: Anti-ESG Proposal Surged in 2024 But Earned Less Support
Heidi Welsh, Executive Director at the Sustainable Investments Institute, reports that while there have been 100 anti-ESG proposals filed by shareholders so far this year, more than 98% of shares cast at company annual general meetings rejected these proposals. Read More
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The Deal: Activist Investing Today: Donahue Talks Vote-No Amid Activism
Sean Donahue, Co-Chair of Paul Hastings' Shareholder Activism & Takeover Defense practice, joins The Deal’s Ron Orol to discuss how companies with majority voting standards for board elections are potentially more vulnerable targets in activist campaigns. Listen Here
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UCLA School of Law: DExit Drivers: Is Delaware’s Dominance Threatened?
Stephen Bainbridge, UCLA William D. Warren Professor of Law, examines how other states, especially Nevada, which has made moves to moves to attract corporations through lucrative tax benefits, are jockeying to overtake Delaware’s dominance in corporate law. Read More
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Harvard Business Review: Power, Influence, and CEO Succession
A new HBR article by Dan Ciampa and Adam Bryant offers insights for how companies can help ensure successful CEO transitions, particularly the importance of gaining support and the backing of key stakeholders. Read More
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Axios Pro Rata: Global M&A Rebounds in First Half
Kia Kokalitcheva looks at new PitchBook data revealing that deal activity for 2024 is tracking 10%-15% ahead of 2023 levels, both in deal count and deal value. PE-backed M&A in particular has helped drive the resurgence, representing 41% of deal value in Q2. Read More
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Freakonomics: Is Over Consolidation a Threat to Democracy?
A two-part Freakonomics podcast looks at the dominance of EssilorLuxottica, the Italian-French eyewear corporation, and whether or not regulators will take action against the company as it continues to grow larger through acquisitions, including its latest deal to acquire streetwear brand Supreme. Listen Here
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Financial Times: Bill Ackman Abruptly Withdraws IPO of Pershing Square US Fund
The hedge fund manager has withdrawn the proposed public listing for his Pershing Square USA closed-end fund aimed at everyday investors. Ackman said he is rethinking the structure of the fund following concerns from potential investors. Read More
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The Wall Street Journal: Why a Cold-Storage Company Just Delivered the Year’s Hottest IPO
Corrie Driebusch and Liz Young look at how Lineage, a cold-storage operator founded in 2008, which has grown to operate nearly a third of all temperature-controlled warehouse spaces in the U.S., pulled off the largest IPO so far this year. Read More
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The Information: Skims, Chime Take New Steps to 2025 IPOs
Investment banks have begun preparing their pitches to lead IPOs for Kim Kardashian’s apparel company Skims and open-banking services giant Chime as soon as Q1 2025, Cory Weinberg reveals. Read More
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FROM OUR DESK TO YOURS
GPP is constantly looking to expand our palates, but when it’s tomato and corn season, you go back to your favorites. On Sunday, we made the simple and easy Pan Con Tomate with tomatoes, garlic and basil from Vicki’s Veggies in Amagansett spread over almost any kind of toasted bread. This appetizer pairs with any wine and we went with cooler climate regions of California: A Provence-style rose from Bedrock Wine Co. in Sonoma, and a Rhone-style Syrah from Sandhi. Both ship DTC.
Speaking of French regions, we have been loving the Paris Olympics, the month following the 80th anniversary of D-Day, June 6, 1944. In the spirit of thinking about France, we offer you a book that has been compared to Anne Frank’s diaries called Suite Francaise by Irene Nemirovsky. The book, which was found and published over 60 years after the author’s death in Auschwitz, is a gripping tale of how the French lived under the Vichy regime, the occupation by Germans of small towns and villages, and how locals learned to coexist with the enemy “in their towns, their homes, even in their hearts.”
Speaking of love, our interns! We took our interns and new analysts out for our summer trek to Citi Field and enjoyed watching the Mets beat the Minnesota Twins 2-0, and of course enjoyed the Edwin Diaz entrance song (‘Narco’ by Timmy Trumpet). Fun was had by all as ate our way through the victory.
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Boeing has appointed Kelly Ortberg, former CEO of Rockwell Collins, as its next President and CEO. Ortberg will start his new role August 8. Read More
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JPMorgan named Darren Novak and Alfredo Porretti global co-heads of the bank’s activism defense unit. Read More
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Elizabeth Gonzalez-Sussman is leaving Olshan Frome Wolosky to lead the shareholder engagement and activism defense practice at Skadden. Read More
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