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Do shareholder resolutions create shareholder value? T. Rowe Price says no. The investment manager issued a report analyzing shareholder proposals from last year’s proxy season and concluded that over half (55%) are detrimental to investors, writing, in part: “It is a notable and unfortunate development, in our view, that [these] shareholder proposals…can be categorized as either untethered to, or negatively aligned with, economic outcomes for investors.” Jamie Dimon echoed a similar sentiment in JPMorgan’s annual shareholder letter, denouncing the “spiraling frivolousness” of annual shareholder meetings and criticizing the “undue influence” of third-party advisors like ISS and Glass Lewis on proxy matters.
Speaking of ISS and Glass Lewis, both proxy advisors weighed in this week ahead of Norfolk Southern’s Annual Shareholder Meeting on May 9. Monday, Glass Lewis recommended investors vote for six of Ancora’s nominees, including proposed CEO Jim Barber. The next day, ISS issued its report recommending eight of Norfolk Southern’s proposed 13-director slate, including current CEO Alan Shaw. Norfolk Southern responded by saying, “ISS's recommendation in favor of a majority of our director nominees underscores the strength and effectiveness of our board…”
Finally, activists continue to go global in search of new targets. Elliott Management built a large stake in Japanese trading house Sumitomo Corp. after recent investments in Mitsui Fudosan and previously targeting Toshiba, SoftBank and Dai Nippon Printing. Also, a new report from Diligent Market Intelligence reveals Germany is seeing a resurgence in activist campaigns and has moved into the number two target market for activists in Europe, behind the U.K.
Have a great weekend,
GPP Team
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