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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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1/16/2027

Dealmakers See More Retail Mergers and IPOs in 2026 After Tariffs Sidelined M&A Last Year

Reuters (01/16/27) Summerville, Abigail

Dealmakers predict an uptick in mergers and IPOs for retailers and consumer goods companies this year after punishing tariffs on imports to the United States had sidelined activity in the industry for the first half of 2025. Several national restaurant and convenience store chains are primed for IPOs, along with organic baby food company Once Upon a Farm, Hellman & Friedman-backed auto repair company Caliber Holdings, and Bob’s Discount Furniture, which is owned by Bain Capital, according to more than two dozen CEOs, M&A advisors and private equity investors who attended the ICR Conference in Orlando, Florida this week. “The number of high-quality companies that are in queue to go public in 2026 is higher than we’ve seen since 2021,” Ben Frost, Goldman Sachs' (GS) global co-head of the consumer retail group said in an interview. “The question is does that mean more will go public? If it does, private investors will see the ability to exit investments again (in a) regular way, which will help (private equity) activity.” Frost was one of the more than 3,000 attendees at the annual gathering, where executives from Walmart (WMT.O), Shake Shack (SHAK.N), and Jersey Mike’s were among presenters while bankers, lawyers and private equity investors spent much of their time brokering deals and landing clients behind the scenes. The upbeat mood was a marked shift from last spring after U.S. President Donald Trump's "Liberation Day" tariff announcements sent markets skidding and killed or stalled several consumer and retail deals. The second half of the year saw a resurgence in activity that brought with it several mega deals, including Kimberly-Clark’s (KMB.O) nearly $50 billion deal to buy Kenvue (KVUE.N), announced in November. "(Companies) are still really focused on growth and synergies. They’re looking at bigger deals than they’ve been willing to do for the last number of years. The back half of last year was the start of that,” Frost said. Kraft Heinz (KHC.O) announced in September it would split into two companies to unwind its 2015 merger, shortly after Keurig Dr Pepper (KDP.O) had agreed to buy JDE Peet’s for $18 billion with plans to split the coffee and non-coffee beverages into separate companies. In apparel, Gildan Activewear (GIL) bought Hanesbrands for $2.2 billion. Investors could also spur more deals and corporate breakups in the sectors, Audra Cohen, co-head of the consumer and retail group at law firm Sullivan & Cromwell, said in an interview at the conference. Corporate agitators have taken recent stakes in Lululemon Athletica (LULU.O) and Target (TGT.N), but aren't yet pushing for M&A. Lululemon hosted a morning yoga class and its management team met with analysts and investors at the conference. Meanwhile, private equity buyers are beating out companies for some deals, Manna Tree Partners co-founder Ellie Rubenstein told Reuters. Her firm sold its cottage cheese brand Good Culture to a larger consumer-focused firm L Catterton just last week. “A lot of these brands have gotten lost (inside big corporations) and the consumers don’t like it. You may see a lot of corporate carveouts this year,” Rubenstein told Reuters in an interview after her keynote address. She interviewed her billionaire father and Carlyle co-founder David Rubenstein, 76, on stage at the conference. The father-daughter pair contrasted their portfolios, pointing to Carlyle’s history of investing in fast food chains like McDonald's (MCD.N) and KFC Korea while Manna Tree saw big returns from investments in healthier food brands like pasture-raised egg producer Vital Farms (VITL.O) and Good Culture.

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4/1/2026

The Changing Proxy Advisor Landscape

Reuters - Practical Law Journal (04/01/26) Aquila, Francis J.

Francis J. Aquila, partner at Sullivan & Cromwell LLP, writes that proxy advisors have long played an important role in investor voting. Voting outcomes across companies on a range of matters, including director elections, executive compensation, governance provisions, and strategic transactions, traditionally align closely with the recommendations of proxy advisors based on their benchmark policies. However, recent developments could impact the long-standing equilibrium between public companies, their investor base, and proxy advisors, and have significant implications for corporate governance and shareholder engagement. In high-stakes situations, such as close votes and activist campaigns, recommendations from proxy advisors often framed the public discourse and could influence voting outcomes. Engagement with proxy advisors has often been crucial for obtaining a positive outcome. In the context of activism defense, a company’s adoption of governance practices that align with benchmark policies has been a helpful strategy for gaining proxy advisor support when a high-stakes situation does arise. For the upcoming year, proxy advisor recommendations will likely continue to meaningfully correlate with voting outcomes in many cases, even if the degree of alignment is decreasing. This means that reviewing and understanding the priorities reflected in proxy advisor policies will likely remain a useful exercise for the Board. However, particularly in close votes and contested situations, it will be increasingly important for the Company to understand how shareholders are currently using proxy advisory policies and services rather than assume voting alignment with proxy advisor benchmark policies. Given the evolving nature of investor voting practices and limited visibility into them, this exercise will likely require the involvement of experienced advisors who can combine historical data analysis (which may be less predictive than in the past) with up-to-date information on the latest trends. Additionally, in recent months, many issuers have had a harder time obtaining an engagement meeting with proxy advisors. Even successful engagement efforts with proxy advisors may no longer yield the same level of impact on overall shareholder votes due to the increasing customization of institution-specific policies and internal voting frameworks. Round red table symbolizing important issues facing boards of directors of U.S. companies. Companies should prioritize articulated investor priorities, rather than assumed benchmark alignment, when making governance and shareholder engagement decisions. Against this backdrop, a careful process, informed engagement, and disciplined planning are not optional refinements for the Company. The changing proxy advisor landscape calls for deliberate, ongoing reflection and recalibration. To remain prepared for shareholder activism in this environment, the Board should monitor developments regarding proxy advisors and related responses from key shareholders, including any updates to voting practices. The Board should also continue to maintain and update its understanding of the expectations and priorities of key shareholders, which continue to evolve. Companies should prioritize articulated investor priorities, rather than assumed benchmark alignment, when making governance and shareholder engagement decisions. “Tabletop exercises” with experienced advisors (such as law firms, investment banks, and public relations firms) can be very helpful in both activism situations and ordinary-course corporate governance planning. These simulated contested situations can help the Board and management evaluate how different shareholder constituencies may respond in a diverse range of scenarios, anticipate inflection points in alignment and conflict, and identify where engagement efforts may be most impactful. Experienced advisors can help the Company remain prepared for shareholder activism, particularly in light of the evolving proxy advisor landscape.

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4/1/2026

Billionaire Nelson Peltz Plans AI Makeover for Janus Henderson

Bloomberg (04/01/26) Gyftopoulou, Loukia

Now that Nelson Peltz has won a surprise bidding war for Janus Henderson Group Plc (NYSE: JHG), the investor can start to revamp the $493 billion asset manager he has circled for years. Peltz is paying about $8 billion, or $52 per share, for Janus Henderson – more than twice where its stock was trading when his Trian Fund Management disclosed its position in late 2020. At age 83, Peltz – who over the years has famously tangled with corporate giants — is shelling out for what many see as a fixer-upper. Fees are getting squeezed in the age of low-cost index funds, and Janus Henderson’s performance has been mixed since the 2017 merger that created it. According to people familiar with Peltz’s thinking, Trian intends to use artificial intelligence to streamline Janus Henderson’s business and wring out time-consuming processes. Central to all of this is Trian's partner in the deal, General Catalyst, the technology-focused investor that has backed Anthropic, Stripe and defense tech firm Anduril Industries Inc., among others. General Catalyst has invested billions in AI companies, applications and partnerships. It recently launched a company called Percepta that deploys AI researchers, engineers and product managers across a range of businesses to transform traditional workflows using artificial intelligence. Soon on its to-do list: Janus Henderson. Percepta, whose founding team included alumni of data-analysis firm Palantir Technologies Inc. (NASDAQ: PLTR), will be part of Peltz’s effort to modernize middle- and back-office functions, according to people familiar with the plan. Janus already uses some AI tools but plans to deploy Percepta’s more-advanced technology to speed up lengthy fund-creation and other processes and meet investors’ growing demands, people familiar with the matter said. Without public shareholders to answer to, Janus will be able to spend big on these new technologies and make hires in other parts of the business. Representatives for Trian, General Catalyst and Janus Henderson declined to comment. Peltz has been shaking up Janus Henderson off and on for years now. When Trian began amassing its stake, Janus was bleeding assets and still struggling as a merged firm. Peltz quickly cleaned house, assumed two board seats and pushed for new leadership. Ali Dibadj took over as chief executive officer in 2022, and Peltz cheered his arrival. The new CEO has managed to win back clients, reverse several years of outflows and heal divisions within the firm, insiders say. Given Trian's history with Janus Henderson, the sudden emergence of a rival suitor unsettled some at the company. A relative unknown, Victory Capital Holdings (NASDAQ: VCTR), first approached Janus Henderson's board in November and then went public with an offer in February. Dibadj and other executives were soon fielding calls from anxious clients, people familiar with the matter said. Victory, a Texas-based acquisitive mutual fund firm, has a reputation for aggressive cost-cutting and running lean operations, a process Janus Henderson employees were referring to internally as “cost-gutting,” according to the people familiar with the matter. Money managers handling roughly a third of the firm's assets threatened to quit if Victory won. Victory, for its part, accused Janus Henderson of not engaging with its offer. Trian shot back, saying Victory lacked the cash to seal a deal. Janus Henderson told shareholders to stick with Trian’s offer. Privately, some in the Victory camp claimed they could win over shareholders without Trian’s blessing, separate people familiar with the matter said. Victory had lined up Wells Fargo & Co. (NYSE: WFC) and Royal Bank of Canada (NYSE: RY) to finance its bid, Bloomberg previously reported. But weeks into the public bidding war, RBC had yet to commit the capital for the offer. In a document dated March 17 that was seen by Bloomberg News, the bank said it would offer the credit line only after completing its due diligence. On March 24, Victory threw in the towel, handing Janus Henderson to Peltz and General Catalyst. Victory did not respond to a request for comment. Now comes the hard part. Modernizing a money manager with $493 billion of assets, thousands of employees and clunky internal processes won’t be quick or easy. The AI integration at the heart of Peltz’s plan will take time, patience and money. Peltz has hankered after Janus Henderson for years. Now, it’s his to fix up.

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4/1/2026

Governance to Remain a ‘Focal Point’ for Shareholders This Proxy Season: Report

ESG Dive (04/01/26) Johnson, Lamar

The number of shareholder proposals filed at S&P 500 and Russell 3000 companies both fell in 2025, after a record year in 2024. The March report noted that “companies now face a proxy environment defined less by volume and more by discretion, legal complexity, and evolving investor expectations.” The number of proposals filed this proxy season “may remain subdued,” but there is expected to be increased scrutiny on the design of submissions, asset managers’ engagement practices and exclusion decisions, The Conference Board said. Corporate governance and executive compensation-related shareholder proposals were the most likely to receive shareholder support in 2025. Corporate governance proposals have received the highest average shareholder support for the past three years, while support for environmental, social and human capital management-related proposals have seen support decline since 2023, per the report's findings. Average shareholder support for governance proposals at Russell 3000 companies was 39% in 2025, stagnant from 2024. Executive compensation proposals were the only topic that saw its average support rise year over year in 2025, with such proposals receiving 16% average shareholder support at Russell 3000 companies, up from 14% in 2024. Average support for executive compensation proposals is still below its 2023 level of 22%, according to the report. The support for governance and executive compensation proposals reinforces “investor prioritization of issues perceived as directly tied to board accountability, pay alignment, and oversight effectiveness,” the report said. This proxy season outlook was also backed by Russell Reynolds Associates and Rutgers Law School's Center for Corporate Law and Governance, alongside The Conference Board and ESGAUGE. To develop the report, The Conference Board reviewed recent management and shareholder proposals at S&P 500 and Russell 3000 companies in a webinar and also spoke to chief legal officers and corporate secretaries “at leading companies in a Chatham House Rule session, the report said. Investors are expected to continue to favor narrowly-tailored governance proposals focused on “clearly articulated governance gaps” that are “aligned with prevailing market norms,” the report said. Executive compensation filings are seen as a “secondary channel for shareholder engagement on pay issues,” The Conference Board said. The regulatory changes to the engagement process initially caused large asset management firms like BlackRock (NYSE: BLK) and Vanguard to pause all engagement meetings. The policy change is still leading to scaled-back engagement, leaving “many asset managers, especially index funds, reluctant to press companies on corporate governance or other policy matters, closing a key channel of communication,” according to a separate report Diligent Market Intelligence released last week. The Securities and Exchange Commission (SEC) also announced in November that it would not weigh in on most no-action requests from companies this proxy season. A pair of activist investor groups recently challenged those changes in court, but, in the meantime, “companies now have far greater latitude to decide which proposals should make their way onto their proxy ballots,” Diligent's report said. Diligent noted, however, that “early attempts at navigating this discretion have seen proponents take exclusions to the court, sometimes leading to settlements or the proposal going on the ballot.” Under the revised no-action rules, companies have “fewer procedural guardrails and diminished opportunities for informal SEC intervention” and should “exercise greater caution” when there are close calls on whether to exclude a proposal, according to The Conference Board report. Companies that strengthen their internal legal and governance review processes for shareholder proposals and engage earlier with proponents will be better able to limit their risks of regulatory, litigation and reputational risks, the report said.

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4/1/2026

Unilever CEO Fernandez Returns to His Roots With Health and Beauty Makeover

Reuters (04/01/26) Naidu, Richa; Shabong, Yadarisa; Marrow, Alexander

As a senior Unilever (NYSE: UL) executive in Brazil some 15 years ago, Fernando Fernandez made a bold gamble on hair care and beauty, rapidly expanding the then newly acquired TRESemmé brand into a major money-spinner in the giant South American market. The 59-year-old Argentine is now CEO and going back to his roots, carving off the sprawling consumer goods firm's food brands, from Magnum ice creams to Hellmann's mayonnaise, with two huge deals since he took the reins last year. This week Unilever sealed a deal with U.S. spicemaker McCormick (MKC.N) to hive off its food business to make a $65 billion sauces-to-spices food giant. Unilever will retain a near 10% stake, with its shareholders having another 55%. The recent spin-offs leave the firm a far leaner beast focused on beauty, personal care and home care, areas where Fernandez spent most of his 38-year career at Unilever selling products from Dove soap to Surf laundry detergent. "This is the right step at the right time to build a simpler, sharper, higher-growth Unilever," Fernandez told analysts on a call after sealing the McCormick deal. "We are creating a 39-billion-euro household and personal care pure play with leading positions in highly attractive categories, a stronger exposure to fast-growing geographies like the United States and India." Without food and ice cream, Fernandez is leaning in to the company's 23 biggest home, beauty and personal care "power brands" that account for the majority of Unilever's sales, including Dermalogica, Pond's, Sunsilk and Cif. Most investors didn't take the news well, with Unilever shares closing at a two-year low on Tuesday and dipping further on Wednesday amid worries about the lengthy timeline to closing the deal in 2027 and the overhang from food. However, some investors see a long-term benefit in faster-growing beauty, personal care and home care products. "Perhaps the most overlooked benefit is the increased focus gained by simplifying Unilever's business model," David Samra, managing director of Unilever investor Artisan Partners and founding partner of the International Value Group, told Reuters. "The company moves from operating in two distinct industries to concentrating on a narrower group of brands in faster-growing markets." The food business is high-margin but sales growth has lagged other units, weighing on Unilever's goal to increase turnover by 4%-6% annually. "The prize of a pure-play home and personal care company will be worth it in the end," Barclays (NYSE: BCS) analyst Warren Ackerman said. Unilever investors and its board had pushed hard in recent years for change, including billionaire shareholder Nelson Peltz, a board member who has a $1.73 billion stake in the firm. That pressured two Unilever CEOs, most recently Hein Schumacher who was ousted for not streamlining the company's portfolio fast enough. Fernandez, his finance chief at the time, was promoted to speed up the process. The deals mark a sharp U-turn after Unilever spent most of the last century snapping up food and beverage brands from Marmite to Colman's and Horlick's. But increasingly health-conscious consumers and the rise of GLP-1 weight-loss drugs in recent years have eroded demand and investors' faith in packaged food, and Unilever also faced stiff competition from cheaper private-label brands. Unilever trades at a forward price-to-earnings ratio of 14.8 times, lower than L'Oreal (OREP.PA), Procter & Gamble (PG.N), Nestle (NESN.S), and Danone (DANO.PA), which trade at between 17.2 and 25.3 times, LSEG Workspace data shows. "Unilever has historically traded at a discount to pure-play HPC peers like L'Oréal or Procter, partly because of the drag from lower-growth food categories," said Will Nott, portfolio manager at Unilever investor Ninety One. "There is clearly re-rating potential, but it won't happen overnight. The market will want to see clean execution through the transition."

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3/30/2026

Investors Suing to Vote on ESG Proposals Meet Corporate Pushback

Bloomberg Law (03/30/26) Ramonas, Andrew; Hutchinson, Drew

Chubb Ltd. (NYSE: CB) and BJ’s Wholesale Club Holdings Inc. (NYSE: BJ) have a message for shareholders suing companies to demand action on environmental, social, and governance (ESG) issues this year: Back off. The companies are forming a budding resistance to an influx of investor lawsuits aimed at getting ESG proposals on annual meeting ballots. The litigation came after the Securities and Exchange Commission (SEC) under Republican Chairman Paul Atkins in November stopped refereeing most proposal disputes between shareholders and companies, which often sought SEC advice before blocking resolutions from annual meeting votes. In contrast with Chubb and BJ’s, PepsiCo Inc. (NASDAQ: PEP) and AT&T Inc. (NYSE: T) quickly settled lawsuits with deals to permit shareholder resolutions, offering little or no pushback. Taser-maker Axon Enterprise Inc. (NASDAQ: AXON) also rapidly reached a settlement in another shareholder proposal case, though the company did tell a court it had followed SEC rules on resolutions. Shareholders rarely sued companies planning to block their proposals until the SEC policy shift last year. Investors have since brought at least six cases, including a lawsuit against UnitedHealth Group Inc. (NYSE: UNH) March 20. So far, none of them have ended without corporate concessions. The litigation is the latest front in a decades-long struggle between activist investors and companies over shareholder rights. Investor advocacy group As You Sow, New York state’s pension fund, and other organizations behind the lawsuits have fought companies at the SEC for years to offer ESG proposals, including on issues surrounding climate change and other environmental risks. “Few of us are surprised” by the litigation, said Mike Flood, senior vice president of the U.S. Chamber of Commerce’s Center for Capital Markets Competitiveness. “That doesn’t mean we’re happy.” The lawsuits are the “necessary result” of having a shareholder proposal process that doesn’t work, said Danielle Fugere, president and chief counsel of As You Sow. The organization is suing the SEC over its decision to stop weighing in on investor proposals, while also pursuing a case against Chubb. As You Sow filed its lawsuit against Chubb March 3 after the insurer said it intended to block the group’s proposal to report on any company efforts to seek compensation for losses related to climate change. The case came after the SEC told Chubb in January it “will not object” if the company omits the resolution from the voting materials for its upcoming annual meeting. The insurer had told the regulator it planned to bar the resolution under agency rules that let companies prohibit proposals concerning their ordinary business operations and seeking to micromanage them. If cases against Chubb and other companies continue, courts will be tasked with interpreting how far “ordinary business” goes. The agency in November started sending companies letters saying it won’t object to their exclusion plans, if they request the declaration. The SEC previously told companies whether it accepted—or rejected—their use of agency rules to scuttle proposals. The regulator can bring cases alleging companies wrongly omitted proposals. As You Sow said in its complaint in the U.S. District Court for the District of Columbia that Chubb’s plans would violate the SEC’s shareholder proposal regulations. The insurer has disputed the claims, saying in a March 19 court filing that As You Sow’s resolution is an “axiomatic example of in-the-weeds interference with daily operations.” BJ’s Wholesale Club is fighting similar claims from New York Comptroller Tom DiNapoli in the U.S. District Court for the District of Massachusetts. He manages the New York State Common Retirement Fund, a BJ’s investor. DiNapoli said in a March 2 complaint that the retailer would break SEC shareholder proposal rules with plans to block a New York State Common Retirement Fund proposal. The resolution seeks a report on risks BJ’s may face from deforestation. Like Chubb, BJ’s told the SEC it intended to bar the proposal under agency rules that permit companies to forbid resolutions related to normal operations or that try to micromanage them. BJ’s also solicited a letter from the SEC saying the agency won’t object to its plan to prohibit the New York pension fund proposal. The company has challenged DiNapoli’s lawsuit, saying in a court filing it “properly excluded” the proposal. A spokesperson for DiNapoli said the comptroller is “committed to protecting shareholder rights.” Representatives of BJ’s and Chubb didn’t respond to requests for comment. The pushback from Chubb and BJ’s comes as the companies are fast approaching periods when they’re expected to issue proxy voting materials to investors and hold annual meetings. Chubb has slated its annual meeting for May 21, with final voting paperwork due by April 7, according to a preliminary proxy statement. BJ’s has yet to announce an annual meeting date, though it generally hosts the gathering in June. Companies must give investors proxy voting materials with any shareholder proposals up for consideration at least 40 days before their annual meetings. Axon initially fought back in court against the Nathan Cummings Foundation, which sued in February over company plans to bar the investor’s political spending proposal. But the company quickly agreed to disclose the information, resolving the case three weeks later. PepsiCo and AT&T settled investor lawsuits over their plans to block proposals even faster. Both agreed in February to include the resolutions on their ballots within days of being sued. The Axon, PepsiCo, and AT&T deals came less than two months before they normally send out proxy materials. The companies have held their annual meetings in May in recent years. Including proposals is often easier and more efficient than entering a court battle, said Shuangjun Wang, a partner at Cleary Gottlieb Steen & Hamilton LLP. Companies must weigh the possibility of plaintiffs getting preliminary injunctions compelling a proposal vote or being ordered to hold a special meeting later to consider the resolution, she said. “There may be some cases where it’s worth fighting, but in many cases they have bigger fish to fry,” Wang said.

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3/28/2026

Korea Weighs Inheritance Tax Based on Book Value, Not Market Prices

Financial Times (03/28/26) Jung-a, Song

South Korea is weighing plans to base inheritance tax on book value instead of market value in order to curb the alleged suppression of share prices. Under a law proposed by President Lee Jae Myung’s ruling party, inheritance taxes for heirs to stock in listed companies trading at a price-to-book ratio of less than 0.8 would be calculated based on asset value and earnings rather than using the current share price. The new rules, if passed, would remove the incentive to keep share prices low in order to reduce inheritance tax and maintain family control — potentially helping to close the infamous “Korea discount." “We will open the ‘Korea premium’ era... through measures including the stock price suppression prevention law,” said Han Byung-do, floor leader of the ruling Democratic Party of Korea. South Korea’s inheritance tax is among the highest in the world with the headline rate standing at 50%. This can increase to 60% for controlling shareholders in companies, since the valuation of their stake is marked up by a notional 20% before inheritance tax is applied. The government’s bill would also abolish this 20% surcharge, if the stock price was formed “normally,” and allow the estate to pay with shares instead of cash. Analysts have frequently cited the levy as a structural factor behind the Korea discount — low valuations for the country’s shares relative to other markets. Many investors would rather the government simply cut the inheritance tax rate. “Calls for inheritance tax cuts have risen sharply as the government rolls out a series of measures to resolve the Korea discount,” said Albert Yong, managing partner at Petra Capital Management, a Seoul-based hedge fund. “Many Korean companies still try to keep stock prices low to reduce inheritance taxes for controlling families.” Activists say tax reform could align the interests of controlling and minority shareholders, pointing to an increase in dividend payout ratios following tax cuts on dividend income. “The fundamental issue in Korea’s corporate governance is the misalignment of interests between controlling and minority shareholders,” said Namuh Rhee, chair of the Korean Corporate Governance Forum. “Minority shareholders want higher valuations, but controlling shareholders have little incentive to lift stock prices because that increases their inheritance tax burden.” Rhee said that lowering the inheritance tax rate to 20-30% would promote “long-term harmony” between the two groups. According to research group Leaders Index, heirs to the country’s top 30 conglomerates face Won64.8 trillion ($45.2 billion) in combined inheritance tax bills. In April, Samsung’s (KRX: 005930) Lee family will complete the payment of about 12tn won in inheritance tax — the largest such payment in the country’s history — following the death of patriarch Lee Kun-hee in 2020. The Koo family of LG Group also paid Won921.5 billion over five years. The bereaved family of Kim Jung-ju, founder of the game developer Nexon (3659.T), transferred part of its stake, making the Korean government the second-largest shareholder in its parent company NXC. Almost every major chaebol group has at some point been accused of corruption or opaque deals aimed at preserving family control. “Korea’s poor corporate governance stems from owner families’ desire to pass on control efficiently,” said Park Ju-geun, head of Leaders Index. “That often leads to dubious intragroup deals and restructurings that distort capital markets and harm minority investors.” Despite growing investor calls, the government is against cutting inheritance taxes for chaebol families. It fears that lower rates would make it easier to entrench dynastic control, hence the proposal to levy taxes at book value instead. Nearly two-thirds of companies on the Kospi trade below book value, meaning the market values them at less than the stated worth of their net assets. Changhwan Lee, chief executive of Align Partners, said change would not come easily. “Controlling shareholders wield outsized influence over decision-making because boards lack independence,” he said. “Even if inheritance taxes fall, their behavior is unlikely to change in this environment. Governance reform should come first.”

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