Activism Hot Topics: Poison Pills, Swaps and Slow-Moving Boards

*Before We Get Started*: GPP will be co-sponsoring this year’s Berkeley Fall Forum on Corporate Governance, taking place in San Francisco on October 10-11. If you’re in town, we invite you to drop by Gladstone’s cocktail party on Monday, October 9th, from 6-8 p.m. at the Pied Piper, located in the Palace Hotel. Please send us an RSVP at if you’d like to join us. 

As the fall begins and a new proxy season inches closer, here are three things companies should be on the lookout for as the 2024 activism season approaches:

1.) A Little Drop of Poison: Bloomberg Law’s Mike Leonard examined the swell of lawsuits attempting to define the proper use of the “poison pill.” Leonard noted that now poison pills are more likely to be used as a blunt instrument to defend against activist investors than their original, targeted function: fighting off hostile bidders. In 2021, the energy company Williams Cos instituted a poison pill with a 5% trigger and a “wolfpack” provision designed to block activists from “acting in concert.” The Honorable Kathaleen McCormick, Vice-Chancellor at the time, invalidated that poison pill, citing a “disproportionate” response to the threat of an activist investor. Fast-forward to 2023 and Chancery is litigating on four poison pill cases similar to Williams Cos. Ann Lipton, Associate Dean at Tulane Law School, says anything that signals “an attempt to rig a proxy context” is going to face more scrutiny. 


2.) Swapping Notes: Axios’s Michael Flaherty analyzed why Elliott Management’s campaign at NRG Energy is being closely followed by the activism community. Although Elliott owns just 1.1% of NRG common stock, the fund has built a large position in NRG using a common and much-criticized activist tactic – using derivative swaps which do not show up in shareholder registers. Elliott is now petitioning regulators for the ability to execute its NRG swaps, which would increase its voting power at NRG to 20%. This situation hits right at the heart of a bigger battle: that of the SEC’s proposed rule that aims to place more limits on how activists use swaps to build their positions – known as proposed Rule 10B-1. A ruling against Elliott in the NRG situation could “embolden” those in favor of placing more curbs on how activists build stakes. But, in Flaherty’s eyes, given the heavy lobbying from the financial industry, “the chances of [the new SEC rule] passing are about as small as Elliott’s common equity stake in NRG.”

3.) Are the times A-Changin’? Change doesn’t happen overnight, especially on corporate boards. The Wall Street Journal’s Theo Francis and Emily Glazer highlighted new data regarding the demographics of Fortune 500 boards directors. They note that while most companies say refreshment and diversity are priorities, the numbers suggest change is happening very slowly. Last year, nearly three-quarters of Fortune 500 board directors were male, and four out of five were white. A major factor slowing progress: most boards are hesitant to enforce a retirement age. And while there is a marked improvement compared to where Boards were five years ago, Glazer and Francis note, change overall is glacial: “At current rates of change, the share of Fortune 500 directors who are Black or Asian will roughly match the U.S. population by about 2030, Deloitte projected. Boards will be about half female by 2040. By contrast, at current rates of change, Deloitte said Latino directors will never catch up to the U.S. population.”  


Have a great weekend, 

GPP Team 


Bloomberg Law: Poison Pills Targeting Activists Push Judges to Draw New Lines

A wave of recent lawsuits has raised questions about the use of the poison pill. Mike Leonard notes that the defensive tool has been used more frequently to fight against activist investors rather than company takeovers. Read More

Axios: NRG Fight Puts Spotlight on SEC's Swaps Debate

Michael Flaherty suggests that Elliott’s ongoing battle with NRG Energy has attracted the SEC’s attention on how activist hedge funds can amass their positions in the first place, with regulators scrutinizing how firms like Elliot can use derivative swaps to amass a stake while avoiding public disclosure radars. Read More

The Wall Street Journal: Amid Push to Diversify Corporate Boards, Change Is Slow

Theo Francis and Emily Glazer look at the demographics of corporate boards and examine whether companies have made good on promises to diversify. Read More


The Wall Street Journal: Dan Loeb’s Hot Hand Goes Cold

Gregory Zuckerman and Peter Rudegeair note that activist Dan Loeb's Third Point is facing "a flood of customer withdrawals" due to recent struggles and investment misfires, as the “strategies that once produced big gains for him – shareholder activism, short selling and startup bets” have not helped Third Point avoid "big losses". Read More

Reuters: Shareholder Proposals Gain Traction in Japan as Activism Thrives

Shareholder activism is on the rise in Japan. Makiko Yamazaki highlights new data from Georgeson revealing that the number of shareholder proposals brought forward during the 2023 annual general meeting season increased 28% as Japanese investors are increasingly pushing companies to use their capital more efficiently. Read More

Bloomberg: Elliott Is Exploring Sale of Technology Company Gigamon

Crystal Tse and Liana Baker report that following the recent Cisco-Splunk deal announcement, Elliott Investment Management is weighing a potential sale of Gigamon, the cloud security company the activist firm acquired in 2017. Read More


Harvard Law School Forum on Corporate Governance: Director Elections Under the Microscope

Edna Twumwaa Frimpong, Head of International Research at Diligent Institute, examines the slight decline in support for director re-elections and points out that Glass Lewis has endorsed fewer director re-election proposals this year while ISS has increased support. Read More

Financial Times: Why Personal Conduct Is a Growing Risk for Business

Anjli Raval explores how a recent string of executive resignations due to undisclosed personal relationships has led to a change in how corporate boards – and employees – are now scrutinizing the conduct of senior leaders. Read More

M&A & IPOs

CNBC: Things Will Get Busier in M&A This Year

Robert Kindler, Global Chair of M&A at Paul, Weiss shares his thoughts on the near-term outlook of the M&A market and how rising interest rates are impacting private equity dealmaking activity. Watch Here

Reuters: Exclusive: Carlyle in Exclusive Talks for $7 Billion-Plus Medtronic Units Deal

David Carnevali reports that the private equity firm Carlyle Group has entered into exclusive negotiations to acquire a majority stake in two medical device businesses of Medtronic Plc. Over the past year, Medtronic has been looking to streamline its portfolio and focus on its higher-growth assets. Read More

Bloomberg: M&A Bankers In Race to Hit $3 Trillion for 2023

Claire Ruckin writes that the countdown is on for dealmakers to hit $3 trillion in dealmaking activity this year – a milestone that has been met every year since 2013. Ruckin highlights the ebbs and flows of recent years including the unprecedented >$5 trillion year in 2021. Read More

CFO Daily: Nasdaq CEO Adena Friedman Thinks Investors Are Sick of Sitting on the Sidelines and Hungry for More Deals Going into 2024

Fortune’s Sheryl Estrada suggests that the recent momentum in the IPO market has resulted in more investor activity and fear of missing out on deals. Adena Friedman, chair and CEO of Nasdaq, says there is a very good pipeline of companies that want to come out and IPO. Read More


Skadden Insights: Corporate DEI Policies Face Scrutiny Following SCOTUS Affirmative Action Decision

Skadden partners Lara Flath, David Schwartz and Amy Van Gelder examine some of the early impact the Supreme Court's ruling on affirmative action has had on corporate DEI policies so far. Read More

Knowledge at Wharton: How Retail Investors Value ESG and Frame Sustainable Investment Strategies

A new study by Wharton Accounting Professor Christina Zhu suggests that while retail investors are more likely to react to ESG-related announcements, they ultimately prioritize any ESG investments based on their impact to overall returns rather than for any altruistic motives. Read More

Financial Times: ESG Ratings: Whose Interests Do They Serve?

Kenza Bryan suggests the Deepwater Horizon oil rig disaster in 2010 brought sustainability risks “to the world’s attention” and precipitated the eventual rise of the sustainability ratings business. However, regulators today are still attempting to better define which groups actually benefit the most from these ratings. Read More


This week, GPP mingled with New York City glitterati at the 7th annual Chefs for Kids’ Cancer, an event supporting efforts to fight pediatric cancer, led by Cookies for Kids’ Cancer. The evening kicked off with a cocktail hour and welcoming remarks from actor Paul Rudd, followed by a four-course meal prepared by some of the biggest names in the NYC food scene, from restaurants including Loring Place, Balthazar, Misi, Peasant and Jupiter. Our table enjoyed banana leaf wrapped salmon prepared by celebrity chefs Dan Kluger, Benjamin Daitz, Ben Pollinger and Josh Sharkey. It was an event for the books – and for those of us swept into the live charity auction, one for the checkbooks.


  • Fortune CEO Alan Murray will be stepping down as CEO at the end of April next year. Read More

  • Andrew Edgecliffe-Johnson has been appointed US News Editor of the Financial Times. He replaces David Crow, who left to become executive editor of The Wall Street Journal. Read More

  • Bloomberg’s Michelle Davis will expand her M&A beat to also cover Media and Telecommunications deals. Read More
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