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4/29/2029

Shareholder Activism in Asia Drives Global Total to Record High

Nikkei Asia (04/29/29) Shikata, Masayuki

Activist shareholders had their busiest year on record in 2024, with the Asia-Pacific region making up a fifth of campaigns worldwide, pushing some companies higher in the stock market and spurring others to consider going private. The worldwide tally of activist campaigns rose by six to 258, up by half from three years earlier, according to data from financial advisory Lazard. Campaigns in the Asia-Pacific tripled over that period to 57, growing about 30% on the year. Japan accounted for more than 60% of the regional total with 37, an all-time high. Activity is picking up this year as well in the run-up to general shareholders meetings in June. South Korea saw 14 campaigns, a jump of 10 from 2023. Critics say South Korean conglomerates are often controlled by minority investors that care too little about other shareholders. Australia and Hong Kong saw increases of one activist campaign each. North America made up half the global total, down from 60% in 2022 and 85% in 2014. Europe had 62 campaigns last year. The upswing in Japan has been fueled by the push for corporate governance reform since 2013 and the Tokyo Stock Exchange's 2023 call for companies to be more mindful of their share prices. The bourse has encouraged corporations to focus less on share buybacks and dividends than on steps for long-term growth, such as capital spending and the sale of unprofitable businesses. Demands for capital allocation to improve return on investment accounted for 51% of activist activity in Japan last year, significantly higher than the five-year average of 32%. U.S.-based Dalton Investments called on Japanese snack maker Ezaki Glico (2206) to amend its articles of incorporation to allow shareholder returns to be decided by investors as well, not just the board of directors. Though the proposal was rejected, it won more than 40% support, and Glico itself put forward a similar measure that was approved at the following general shareholders meeting in March. U.K.-based Palliser Capital took a stake last year in developer Tokyo Tatemono (8804) and argued that more efficient use of its capital, such as selling a cross-held stake in peer Hulic, would boost corporate value. Activist investors are increasingly seeking to lock in unrealized gains from rising land prices, reaping quick profits from property sales that can go toward dividends. Companies in the Tokyo Stock Exchange's broad Topix index had 25.88 trillion yen ($181 billion at current rates) in unrealized gains on property holdings at the end of March 2024, up about 20% from four years earlier. After buying into Mitsui Fudosan (8801) in 2024, U.S.-based Elliott Investment Management this year took a stake in Sumitomo Realty & Development (8830) and is expected to push for the developer to sell real estate holdings. This month, Dalton sent a letter to Fuji Media Holdings (4676), parent of Fuji Television, calling for it to spin off its real estate business and replace its board of directors. Activist campaigns have sparked share price rallies at some companies. Shares of elevator maker Fujitec (6406) were up roughly 80% from March 2023, when it dismissed Takakazu Uchiyama -- a member of the founding family -- as chairman under pressure from Oasis Management. The rise in demands from activists "creates a sense of tension among management, including at companies that don't receive such proposals," said Masatoshi Kikuchi, chief equity strategist at Mizuho Securities. Previously tight cross-shareholdings are being unwound, and reasonable proposals from minority investors are more likely to garner support from foreign shareholders. Some companies are going private to shield themselves from perceived pressure. Investments by buyout funds targeting mature companies in the Asia-Pacific were the highest in three years in 2024, according to Deloitte Touche Tohmatsu. Toyota Industries (6201) is considering going this route after facing pressure from investment funds last year to take steps such as dissolving a parent-child listing with a subsidiary and buying back more shares. Toyota Industries holds a 9% stake in Toyota Motor (7203). The automaker "may have proposed having [Toyota Industries] go private as a precautionary measure," said a source at an investment bank.

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12/8/2025

Donald Trump Drives Historic Shift of Power from Investors to Boardrooms

Financial Times (12/08/25) Indap, Sujeet; White, Alexandra; Temple-West, Patrick

The Trump administration is accelerating a shift in power from the investor to the boardroom, leading some to predict that it is fostering the end of the era of shareholder capitalism in the U.S. Boosted by some Republican states, Donald Trump is quickly chipping away at the long-standing structures and institutions underpinning the influence of shareholders, from proxy advisers and large passive asset managers to bedrock securities and corporation law. The U.S. president is weighing curbs on the voting influence of BlackRock, Vanguard, and State Street, whose index funds typically own 20-30% of most public companies. It is also taking aim at proxy advisers ISS and Glass Lewis, whose recommendations can sway the votes of other large mutual funds at annual meetings. A person familiar with the White House’s thinking said executive orders could come within weeks. The tilt away from shareholders started in earnest in 2021 after oil supermajor Exxon (XOM) lost three seats in a boardroom battle with eco-conscious hedge fund Engine No. 1, said Lindsey Stewart, director of institutional insights for research group Morningstar. That defeat brewed “resentment” in corporate America and triggered the accelerating boardroom pushback against shareholder rights, he said. “Are we exiting an era of shareholder capitalism and entering an era of managerial capitalism?” asked Stewart. “The pendulum has swung to the complete opposite side of where it was a few years ago.” The SEC has discussed other wide-ranging actions this year to water down shareholders’ ability to bring lawsuits or put pressure on boards of directors. In February, just a month after Trump took office, the SEC changed long-standing guidance, forcing passive investors to file a more expensive and onerous disclosure form if they wanted to press companies on social or environmental issues. Then the agency said it would consider revising rules requiring quarterly financial reporting for public companies. In November the SEC announced that it would largely halt its standard review of shareholder proposals, a move that allows companies to block them at their own discretion. The change, experts say, will make it harder for investors to demand change. Some corporate advisers warned that the changes, if enacted, were not necessarily as pro-growth or pro-management as the administration had hoped and could have unintended consequences. In one example, proxy advisers and large index funds often side with management over hedge fund agitators. “We’re nervous and watching,” Michael Garland, assistant comptroller for corporate governance at the New York City Employees’ Retirement System, said. He added that his organization hoped “not every company will take the bait because that could expose them to the reputational risk of shareholder backlash.” Some investors, however, have welcomed targeted regulatory efforts to narrow the kinds of corporate policies that shareholders can press, which some believe have crept too far into nonfinancial matters. “I think that there is a great sigh of relief at both companies and asset managers” about the prospect of a more focused shareholder advocacy system, said Lauren Gojkovich, a corporate governance adviser and former corporate lawyer. At the same time, law firms are advising their clients to prepare for a more adversarial environment. Erica Hogan, a partner at White & Case, said companies could face direct legal action from shareholders and greater scrutiny from proxy advisers now that the SEC was stepping back as a referee. “I do foresee that in some cases the shareholder activists could go to litigation against companies in ways that we have not seen in prior years,” she said. Prominent investors have also voiced concerns. “Muzzling independent research firms would only reward underperforming CEOs and stifle oversight,” said billionaire activist Carl Icahn, calling some proposed reforms “a recipe for disaster.” U.S. shareholder democracy started to take shape after the 1929 Wall Street crash with the introduction of securities rules to curb corporate cronyism and compel transparency among public companies. But it was not until the 1980s, by which time half of all listed U.S. stocks were held by institutional investors, that shareholders gained real influence, as corporate raiders organized hostile takeovers and brought disparate blocks of investors on board to back their bids. Regulatory shifts over the next two decades that encouraged fiduciary accountability for pensions spurred the rise of the proxy advisers, in effect bringing further co-ordination among shareholders. Several high-profile companies frustrated by stricter shareholder oversight have relocated away from Delaware, long the dominant corporate domicile, to right-leaning states including Nevada and particularly Texas, which has led the charge on reinvigorating boardroom power. State corporation law is the benchmark used to bring lawsuits over breaches of fiduciary duty. Proxy advisers were not immune from the backlash. ISS and Glass Lewis are challenging on free speech grounds a Texas law introduced this year that limits the advice they can give if their recommendations are based on “non-financial” factors. The state has separately tightened laws to restrict shareholders' ability to bring breach of fiduciary duty lawsuits as well as to make proposals at annual meetings. While the clampdown on shareholder power started in Republican-led parts of the country during the presidency of Joe Biden, the Trump administration is pushing for a similar playbook  to be adopted nationwide. SEC chair Paul Atkins in an October speech called on Delaware to use state corporate law to limit shareholder proposals and allow companies to push class-action shareholder lawsuits into mandatory arbitration, in an effort to promote IPOs. Some commentators note that the limits on shareholder power reflect Trump's own moves to maximize his own executive power. “There is an ascendant autocratic view about how corporations should be run: one singular man who has a vision and should be able to act unimpeded,” said Ann Lipton, a law professor at the University of Colorado. Even with the rash of changes, shareholders still retain two powerful tools: the ability to replace directors or simply sell their shares. But the shifting power balance will reverberate. Amanda Fischer, policy director at Better Markets and a former SEC official, said the clampdown on proxy advisers was “an attack on shareholders being able to make decisions based on independent information that they purchase at their own behest.” Ele Klein, a lawyer at McDermott, Will & Schulte who represents activist hedge funds in proxy fights, noted that large passive managers and proxy advisers often came out against the campaigns of his clients. “There is no perfect system,” he said, but “checks and balances tend to make things better.”

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12/5/2025

Another Board Overhaul Caps Off Year of Chaos for Beleaguered Dye & Durham

Toronto Globe & Mail (12/05/25) Silcoff, Sean

For the second straight year, Dye & Durham (DYNDF) will emerge from its annual meeting with a completely overhauled board, after ex-chairman Tyler Proud struck a governance truce with the Toronto legal software company. The deal, announced Friday, is the latest twist in a seemingly endless season of chaos affecting the beleaguered company. Under the agreement, one of the directors nominated by activist shareholder Engine Capital LP last December — Anthony Kinnear — will leave the seven-person board immediately. He is being replaced by newcomer Edward Smith, executive chairman and former chief executive of global manufacturing services company SMTC Corp. Smith becomes chairman of D&D, replacing Bay Street veteran Alan Hibben, who joined the board just 15 days earlier and will remain a director. The remaining two directors left from last December’s Engine-led putsch, Hans Gieskes — who served as interim CEO early this year — and Tracey Keates, will serve the balance of their terms but will not stand for re-election. Three other directors that swept in last December — Sid Singh, who also served as interim CEO, as well as Engine founder and ex-D&D chairman Arnaud Ajdler, and Eric Shahinian — stepped down two weeks ago when Hibben and CEO George Tsivin joined the board. Shahinian had been the nominee of Proud’s holding company OneMove Capital Ltd. under a shareholder rights agreement. The final director who joined last December, Ritu Khanna, left earlier this year. There are more changes. David Danziger, appointed to the board last summer under a standstill agreement between the company and Proud’s brother — ex-D&D CEO Matt Proud — and his holding company Plantro Ltd., has resigned effective Dec. 30. That leaves an empty spot on the slate that Matt Proud is entitled to fill with his nominee under the shareholder rights agreement. Wendy Cheah, chief financial officer of OneMove Capital, is taking Shahinian’s place on the board immediately as his nominee, while Allen Taylor, former chief financial officer of various portfolio companies of Brookfield Asset Management as well as a senior vice-president with the conglomerate, joins as an observer. Come this month’s annual meeting, D&D, under its deal struck with OneMove, will put forward a slate featuring Smith, Cheah, Hibben, Taylor, and Tsivin, plus David Giannetto, a veteran software executive, and whoever Matt Proud offers up as a nominee. Tyler Proud had tried to negotiate a new slate with D&D this fall, but was blindsided when it instead made the changes that brought Hibben on-board. Proud then launched a proxy fight with a slate that included Smith, Giannetto, and Taylor. At the same time, his brother launched his third takeover bid of the year for D&D, offering to pay $5.72 a share in stock and senior unsecured notes. The stock closed Friday at $2.78, near its all-time low and 88% off its 52-week high. D&D went public at $7.50 a share in July 2020 and traded above $50 a share in 2021. The chain reaction of tumultuous events has unfolded as D&D faces a Dec. 18 deadline to file delayed financial statements. If it doesn’t, it will be in default under its senior credit agreement. D&D has said that it expects to file the statements that week. Much of the board drama dates to when Matt Proud tried to lead a management buyout of D&D in 2021, months after it went public. The board rejected his $50.50-a-share bid and instead offered him a rich pay package. That incensed shareholders, led to the exit of two directors and sparked broader discontent among investors about D&D’s debt-fueled acquisition-binge and his management style. Tyler Proud, who had served as chairman before the initial public offering, was among the disaffected shareholders. Engine, a New York hedge fund and experienced activist shareholder, tapped into that investor dissatisfaction when it launched an ultimately successful campaign last year to overhaul the board, which accompanied Matt Proud’s exit from D&D. But the Engine board failed to deliver quick changes as promised, including the hiring of a new CEO, as Tsivin only joined mid-year. It hired and fired a former chief financial officer. The company delivered disappointing results and S&P and Moody’s cut its credit ratings. D&D dealt with constant entreaties, including a brief activist campaign, from Matt Proud, and promised to launch a strategic review to explore a potential sale, after abandoning a similar process last year. This fall, CIBC Capital Markets backed out of leading the review. That process is supposed to kick off by year-end under the standstill agreement with Matt Proud, but the company is currently suing the former CEO to live up to that deal, while he and Plantro are countersuing for $200-million, alleging the board and company acted this year to thwart their interests. “We are encouraged by the steps the company has taken and view the reconstituted board as an important catalyst for the next phase,” Tyler Proud said in a statement.

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12/3/2025

Private Dialogue Preferred Path for Activists in France

White & Case (12/03/2025) Lamarche, Diane; Golshani, Saam; Martin-Gousset, Simon

Private engagement has consistently been the preferred approach for activist investors in France, proving faster, less costly, and more effective than public campaigns. This explains why the Autorités des Marchés Financiers (AMF) and various think-tanks actively encourage confidential preliminary exchanges ahead of any public campaign, a position further reinforced by Paris Europlace in its June 2024 Guide du Dialogue Actionnarial, which promotes early and constructive engagement with issuers. This behind-the-scenes trend will likely continue for several compelling reasons. French listed companies have become increasingly sophisticated in handling activist situations, recognizing the strategic value of pre-empting public campaigns through early engagement. Additionally, activists are no longer viewed solely as adversaries. Lead independent directors and board members now receive specific training on constructive dialogue with activists. The approach delivers mutual benefits: activists achieve objectives efficiently while companies avoid reputational damage and market disruption. Successful recent high-profile cases of the French market demonstrate this model's effectiveness. Given regulatory support, proven results, and growing corporate expertise, the decline in public campaigns reflects a maturing market where private engagement has become the established standard rather than a temporary phenomenon. Activist investors targeting governance reforms typically focus on a set of well-established demands aimed at enhancing board accountability and transparency. In France, where governance standards have undergone a significant upgrade over the past decade, such interventions are now less frequent, but still arise when companies underperform or resist change. The most common governance-related demands include the separation of CEO and chairman roles to avoid concentration of power, as well as efforts to refresh the board. Others are focused on the creation of specialized committees to address conflicts of interest or oversee strategy. On executive pay, activists in the market are also increasingly pushing for enhanced disclosure. Activists may also push for the appointment — or increasingly, the replacement — of a lead independent director to improve shareholder dialogue. These demands reflect global governance norms and are often a prelude to broader strategic critiques. French issuers increasingly anticipate these demands but remain exposed where governance misaligns with shareholder expectations. Event-driven activism and opposition to complex transactions have been a consistent feature of activist campaigns for over a decade, remaining the primary form of activism in recent years. Historically, activists have frequently advocated for spin-offs to break up conglomerate structures and unlock value. The core objective of financial activists remains unchanged: maximizing shareholder value. This can manifest itself in two ways in the context of event-driven activism: either proposing strategic transactions (M&A, spin-offs, carve-outs, divestitures), or opposing management's proposed deals (or the initial proposed terms of such deals).

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12/3/2025

Activist Campaigns More Likely to Engage Female CEOs

Financial Times (12/03/25) White, Alexandra

Female chief executives are more likely to be engaged by activism campaigns than their male counterparts, according to a new report that highlighted the unique challenges women face at some of the world’s biggest companies. Women made up only 6.3% of Russell 3000 CEOs from 2018 through 2025, yet 15.7% of activist campaigns in this period engaged companies with female bosses, according to a report by The Conference Board shared exclusively with the Financial Times. Matteo Tonello, head of analytics at The Conference Board and one of the authors of the report, said: “The percentage of those campaigns targeting female chief executives is twice as high as the rate of representation of female chief executives in the entire chief executive population in the Russell 3000.” The report had contributions from analytics group Esgauge, Russell Reynolds Associates, and the Rutgers Center for Corporate Law and Governance. Shareholder activists have increasingly engaged chief executives as a way to press for change in the boardroom or the strategic direction of a company. Since 2018, activists have launched 127 campaigns aimed at ousting or replacing a CEO in the Russell 3000. While only five campaigns were recorded in 2018, 39 occurred in the first 10 months of 2025. The researchers said they are not certain why female leaders are engaged more often than their male counterparts, but suggested activists could be influenced by gender stereotypes such as the idea that women are more cooperative than men or that they associate leadership traits with masculinity. “There’s a bit of a stereotype where leadership is assessed,” Tonello said. “Female CEOs are held to a higher standard so when they fail, the judgment about the perception of that failure is stronger than an equivalent failure by a male counterpart.” “The real question is are activists implicitly subject to this type of prejudice or are they exploiting it for their campaigns?” he added. Some women may also face the so-called glass cliff phenomenon, where they rise to the top job when the company is facing significant challenges, making them a target for activists. Still, it is difficult for activist investors to replace a chief executive. About 38% of the campaigns since 2018 resulted in a leadership change. Campaigns engaging companies with female leaders resulted in a lower proportion of changes at the top, with just 6% leading to bosses being replaced. “It is a very difficult thing to do as an activist to target a CEO for removal because major shareholders want to make sure that the company maintains stability,” said Damien Park, managing director at Spotlight Advisors, which advises companies and investors on activism and corporate governance. Still, the rate of women leaving the chief executive role in 2025 is higher than during the same period last year and more men are replacing them, according to a report by Challenger, Gray & Christmas, which helps executives to find jobs. “Gender bias and stereotypes are alive and well, particularly during a time when the very concepts of diversity, equity, and inclusion are threatened,” said Jennifer McCollum, president and chief executive of Catalyst, a non-profit that advocates for women at work.

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12/3/2025

Mizuho’s Katz Sees 'Fertile' Conditions Driving Robust M&A Market into 2026

Reuters (12/03/25) Valle, Sabrina

The "fertile" conditions driving dealmaking in 2025 will persist through the end of the year and into the next as CEOs look for scale and private-equity firms offload aging assets, according to Michal Katz, Mizuho Americas head of investment and corporate banking. This year was dominated by megadeals over $10 billion, which more than doubled year-over-year to $1.3 trillion through Tuesday, according to data compiled by Dealogic. That included an $85 billion rail transaction, a $40 billion data center deal, and the largest leveraged buyout ever — a $55 billion take-private of Electronic Arts, Katz said at the Reuters NEXT conference in New York on Wednesday. She cited pent-up demand for M&A and a desire by CEOs to "future-proof" their companies as artificial intelligence upends old business models. Katz also highlighted record levels of shareholder activism in 2025, with investors pushing companies toward event-driven exits, and noted that while AI and tech dominated returns in the S&P 500, healthcare has recently emerged as an active sector.

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12/1/2025

What’s Driving Activism in the UK?

JD Supra (12/01/25) Matthews, Tom; Tolani, Sonica; Woodfield, Alex

U.S. activists are increasingly looking to the U.K. for opportunities. Tom Matthews with White & Case LLP says that many listed companies in the U.K. and Europe continue to be perceived as undervalued compared with those listed in the U.S. This perception has contributed towards recent strong levels of U.K. takeover activity by both strategic and private equity bidders, including many competing bid situations. Other factors which continue to attract U.S. investors to the U.K. market include a stable and activism-friendly regulatory environment. The U.S. also has a more mature activism market compared to the U.K., with many experienced and deep-pocketed activists pursuing similar strategies. For U.S. activists willing to venture beyond their home market, the U.K. and other European markets continue to present many attractive untapped opportunities. The closed-end fund sector has been presenting as a key driver for activism in the U.K. Alex Woodfield of White & Case notes that many U.K.-listed investment trusts have struggled in recent years to address persistent discounts to net asset value (NAV). This has resulted in significant opportunities for shareholder activism and takeover activity, with many of such takeovers being catalyzed by activism, including as a result of activists campaigning for strategic reviews. A number of activists have focused specifically on the investment trust sector, including Saba Capital Management, one of the world's largest investors in the sector. In the past couple of years, Saba has invested heavily in U.K. investment trusts and has negotiated buybacks, liquidation schemes and other transactions with several of those trusts to allow all shareholders to benefit from the opportunity to exit at NAV. In recent months, the wider investment trust market has increasingly been proactively taking steps to reduce NAV discounts, benefiting shareholders of those investment trusts and with the parallel intention of reducing their vulnerability to activism. Meanwhile, UK company boards are responding to U.S.-style activism, which tends to be viewed as more aggressive in a market where behind-the-scenes negotiations are often the norm. Sonica Tolani of White & Case points out that looking back several years ago, there was a widespread immediate attack-vs-defense mentality when it came to activism. Many U.S. activists would come to the U.K. and seek to deploy a more aggressive U.S. market approach to U.K. situations. At the same time, U.K. boards would often have a knee-jerk reaction to being approached by an activist, immediately pulling down the shutters and minimizing engagement. In recent years, the increasing levels of activism in the U.K. have led to greater levels of sophistication on both sides. U.K. boards (and, importantly, their advisors) now increasingly understand the potential value of thoughtful engagement with an activist. The mantra for the majority of situations now, which is recognized by most activists and boards alike, is to seek to engage first, potentially avoiding the cost and distraction of a public campaign. "All that said," Tolani adds, "we have observed a trend over the past 12 to 18 months of activists (in particular those from the U.S.) dialing up their levels of aggression when it comes to board representation. We have not only seen demands for multiple board seats but also calls to sweep entire boards. Matthews points out that "there has been an ongoing theme in recent years of activists pushing for U.K.-listed companies to add a U.S. listing, migrate their primary listing to the U.S., or spin off a division to be listed in the U.S. In part, this reflected a perceived weakness of the U.K. markets compared to those in the U.S. However, recent moves to enhance the competitiveness of U.K. markets may have reduced the focus on choice of listing venue compared with 12 to 24 months ago. Nonetheless, adding or changing listing venues will remain a thesis for some companies, based on their specific circumstances, and the optimal configuration of listing venues will remain under consideration for many companies on an ongoing basis regardless of any immediate pressure from an activist." He also expects to continue to see the theme of U.S. listings forming part of the thesis of break-up campaigns. Rather than arguing that a company should move its listing, an activist may perceive more immediate value in arguing that a U.S.-focused part of the group should be spun-off and listed in the U.S.

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11/23/2025

Opinion: The Proxy Process Needs an Overhaul

Wall Street Journal (11/23/25) Zecca, John

John Zecca, executive vice president and global chief legal, risk, and regulatory officer of Nasdaq, writes that proxy voting was designed to empower investors by giving them a voice in decisions at the companies they own. Today’s proxy process doesn’t live up to that vision. Instead, it has weakened investor participation, drains company resources and is more a barrier than a bridge to shareholder engagement. The process has undermined the public markets’ core purpose: enabling hardworking Americans to create long-term wealth. At Nasdaq, we have long advocated for reforming the proxy process. We’re encouraged by reports that the Trump administration is considering an executive order to address the issue. A major roadblock is the undue influence of proxy advisory firms on the process. Due to the sheer volume of public companies and proposals, institutional investors—who manage vast portfolios—have come to rely on proxy advisory firms as essential intermediaries. These firms don’t have to disclose or explain the criteria underpinning their voting advice. Nor are they required to correct factual errors in any of their guidance. Proxy advisers don’t have to disclose conflicts of interest, leaving investors and companies in the dark about potential biases that could influence voting recommendations. These dynamics leave crucial decisions in the hands of a few advisory firms that wield disproportionate influence over the trajectory of corporations while operating with minimal accountability. Proxy advisory reform would bring transparency and remove conflicts of interest. We welcome the proposal by Rep. Bryan Steil (R., Wis.) in the Protecting Americans’ Retirement Savings from Politics Act, which would require proxy advisory firms to register with the Securities and Exchange Commission and to disclose publicly any conflicts of interest. The proposal also would require proxy advisers to provide companies with a reasonable opportunity to respond to any errors in their voting recommendations. These measures would help rebalance the relationship among proxy advisers, companies and their institutional investors. Another drag on shareholder engagement is the need for companies to use third-party intermediaries in order to communicate with their retail shareholders. These intermediaries have created unnecessary complexity and costs, all while profiting from a monopolistic model that limits a company from communicating directly with its shareholders. In the 2024 proxy season, retail investors voted on only 29.8% of the shares they owned, in part because it’s near-impossible for companies to communicate directly with their shareholders. Companies have little say in selecting these intermediaries; instead, brokers dictate the choice. This lack of autonomy leaves companies unable to manage how they communicate with shareholders, while the billing practices of these intermediaries remain opaque. So far this year, Nasdaq has incurred more than $675,000 in fees for distributing Nasdaq’s annual proxy materials to shareholders. That doesn’t include costs for printing, advisory services or other aspects of the proxy process. Our distribution costs increased by 35% from 2024 to 2025, even as technology has vastly cut the cost of communication. Regulators should push to let companies communicate directly with their shareholders through technology-driven solutions. The blockchain, for instance, could offer a secure channel for communication. Regulators should also encourage competition by letting companies, and not brokers, choose their proxy-distribution firms and negotiate fees for their services. We’re encouraged that policymakers are considering the shareholder proposal process as part of reform efforts. Shareholders should be able to raise concerns with a company, but a small group of activists trying to exert disproportionate influence has corrupted the process. Today, a shareholder, or someone purportedly acting on his behalf with a small stake in a company, can wield outsize influence, drawing on company resources and commanding the time and attention of management, boards and other shareholders. These time-wasting proposals rarely get any support; during the 2024 proxy season, there were 579 shareholder proposals with average support below 25%. We encourage the SEC to revisit the minimum voting thresholds required for a shareholder proposal to be resubmitted in subsequent years to prevent repeat unsuccessful proposals from jamming the process. Public markets remain the most powerful and inclusive engine of wealth creation in the world—fueling innovation, economic growth and opportunity for millions of investors. But the proxy process that underpins shareholder engagement needs modernization. The Trump administration can create a more efficient and fair mechanism that will empower shareholders while strengthening the public markets and supporting the American economy.

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11/19/2025

Commentary: Everyone Calm Down, Hopes the SEC as it Tries a Balancing Act on Proxies

Reuters (11/19/25) Kerber, Ross

A bureaucratic shift by the SEC on proxy resolutions this week drew howls of alarm from reform-minded investors worried that the agency just gutted a key tool for shareholder activism, notes Reuters columnist Ross Kerber in this opinion piece. But there is more to the story, according to a person familiar with the SEC staff's decision. "This person told me that with the changes, the SEC's Division of Corporation Finance tried to strike a delicate balance between protecting shareholder and corporate rights, and staff time," says Kerber. "I couldn't convince this person to go on the record, but it's an intriguing alternative explanation. We will know by next spring who was right." Every year around this time, activists start to file hundreds of proposed resolutions to be voted on at the springtime annual meetings of U.S. companies, often on hot-button issues like workforce diversity and climate change. Traditionally, liberal-leaning groups accounted for most of the measures, although lately many conservative filers have also appeared. Executives dislike many of these resolutions both as distractions and because some of the proposals would have companies pick sides on culture-war topics. But the resolutions have also brought about important changes like the end of staggered boards. SEC Chairman Paul Atkins, an appointee of U.S. President Donald Trump, has made no secret of his sympathies for the corporate case against the measures, and the agency has taken other steps to shift power from investors to managers. "That context is why many were alarmed on Monday," suggests Kerber. On that day, the SEC said that for the rest of the current proxy season it would no longer make rulings on common corporate objections to shareholder resolutions, such as whether an activist's proposal was filed late or whether a filer owned enough shares. One critic was the SEC's sole Democratic member, Caroline Crenshaw. In a note, she called the change "a Trojan Horse" that in the cloak of neutrality "effectively creates unqualified permission for companies to silence investor voices." Kerber's source said the real point is that companies themselves now will just have to decide how much they really believe in their own objections to the proposals, which can be as small-potatoes as arguing that a shareholder proposal exceeded a 500-word limit. This person added that companies that know they have a strong case to object will leave resolutions off their proxy ballots, while other companies that are not as confident may decide to be more conservative and include more items. Sanford Lewis, a lawyer who often represents activists, said that in practice, most proponents cannot afford to sue companies that improperly skip their resolutions. Of the SEC's change, he said, "It's not a middle course, it's jettisoning a program and process that was working." The Investment Company Institute, meanwhile, said it is still reviewing the matter. Chris Iacovella, CEO of the American Securities Association, which represents smaller regional firms, said his group "applauds the SEC for taking another important step to depoliticize the shareholder proposal process and lower the cost of being a public company." Tim Schwarzenberger, a portfolio manager for conservative-leaning proposal filer Inspire Investing, said it is too soon to tell the impact of the SEC's change since companies that go too far could be punished by investors in court. Some companies “may decide that early engagement is a safer path than trying to exclude proposals without the protection of SEC staff review," he said.

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