Proxy voting ballots for contested board elections will be officially universal starting next year. This week, the SEC voted to require companies to give shareholders a “universal ballot” – a single sheet listing all director candidates. In the past, unless you attended an AGM in person, investors had to choose between management’s slate of directors or the dissident’s slate – no picking and choosing.
Sidley called the ruling “dramatic,” arguing throughout the process that the new rules would equate to “proxy access on steroids.” Sidley argues that allowing barbarians on a single ballot puts companies in a bind. With a universal ballot, tiny shareholders are granted significant rights in their ability to unseat a corporate director, with no ownership threshold required. Universal ballots are a win for activist investors of all stripes, the firm’s Shareholder Activism & Corporate Defense Practice said in its response.
SEC Commissioner Gary Gensler, for his part, said the regulatory body took a common-sense approach – one vote, one ballot, one process for remote/in person. A win for “shareholder democracy,” Gensler said. The move comes just two weeks after the SEC’s new guidance made it easier for shareholders to take action on issues such as climate change and environmental impact.
Speaking of shareholders, be sure to read PJT Partners’ interview with State Street’s stewardship team, on corporate engagement, their new overboarding policy and what they’re looking for from companies in the year ahead.
On the activist campaign front, a busy week. Notable campaigns include:
Across the pond, Elliott Management has put the pressure on British utility company SSE to sell its electricity-network assets. Elliott has been meeting privately with SSE officials and other major shareholders to separate the company’s renewable portfolio from its regulated grid business.
In addition, pressure from activist investor giants Elliott and Starboard seems to have gotten to Willis Towers Watson as the company announced plans to replace nearly half of its board.
Trian has a track record in FIG activism (Bank of New York Mellon specifically) and that experience popped up in the news this week when the Nelson Peltz hedge fund publicly pushed for management and operational changes at asset management firm Janus Henderson Group. With over a 15% stake in the company, Trian’s demands will surely linger.
Have a great weekend,
Mike and Chris