Category Archives: Shareholder Activism

Three Step Approach to Social Media for Investor Relations

By Dennis Walsh, Vice President

social mediaI recently moderated a webinar hosted by NIRI on social media strategies for investor relations. On the panel with me were David Jackson, CEO, Seeking Alpha; RJ Jones, Investor Relations Officer, Zillow; and Andrew Shapiro, Founder, President and Portfolio Manager, Lawndale Capital Management.

The discussion made clear that professional investors are using social media – activists included. In addition, all public companies should have a social media strategy, even if the objective is just to monitor the online conversation.

If you are in charge of managing your company’s investor relations program, you might be wondering how to get started developing your social media strategy.  Try following this three step approach: Continue reading

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Filed under Investor Relations, Shareholder Activism, Social Media

10 Tips for Dealing with Shareholder Activism

By Maureen WolffPresident and Partner, Sharon Merrill Associates

For many companies, a looming activist shareholder is no longer the exception – it’s the rule. One reason is that an increasing number of hedge funds are using activism as a standalone strategy. Assets managed by activist hedge funds increased 42% in 2013 to $93 billion from $65.5 billion in 2012, according to Hedge Fund Research, Inc.

The swirl of activism has the C-suite and the board concerned. In a poll of executives for its recent Capital Conference Barometer, Ernst & Young reported that nine of 10 executives acknowledged that issues raised by shareholders have influenced boardroom agendas, with cost reduction and operational efficiency identified as the most pressing concern over the next 12 months.

The threat of activist investors encircling your company can be intimidating – unless you understand how to engage, respond and communicate. Here are 10 strategies to help you prepare. Continue reading

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Notes from a NIRI Annual Conference Attendee

By Dennis Walsh, Senior Consultant & Director of Social Media

Last week, I attended the NIRI Annual Conference.  It was very educational and an incredible opportunity to meet and exchange ideas with many of the approximately 1,300 investor relations professionals from more than 20 countries that attended the event in Seattle. 

NIRI organized more than 45 informative panel sessions and workshops that were led by some of IR’s top influencers. While I wanted to attend each one, unfortunately I am not omnipresent. For those that I did attend, I left with several key takeaways that can benefit any IR program and wanted to share those with you here at The Podium. Continue reading

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Filed under Board Communications, Board of Directors, Investor Presentation, Investor Relations, NIRI, Shareholder Activism, Shareholder Surveillance, Social Media

A Curious Tale from the Annals of Shareholder Activism

By Maureen Wolff, President and Partner

Nothing has more power to change a boardroom’s dynamics than the election of dissident directors – especially when they arrive as a twosome. I had the honor of moderating a panel discussion on shareholder activism at the National Association of Corporate Directors New England Chapter breakfast event earlier this month, where seasoned board members talked about the lessons they’ve learned in battling high-profile proxy contests over the years.

One of the stories, told by a former board chairman, involved the legendary corporate raider Carl Icahn. A manufacturing glitch had resulted in a steep drop in his company’s share price. After repeated attempts, Icahn was finally successful in having two of his nominees elected to the board. This occurred not long after the principal of another activist institution had been elected as a director, and not long before the company received an unsolicited tender offer at a substantial premium to the then-current share price.

The former chairman painstakingly recreated the scenarios that unfolded over the next few months as the board considered the takeover offer. At first, he focused on the gulf in interests and motivations between the newly elected “directors” and long-time members of the board. Unlike the established directors, who had long been personally committed to the company’s vision, mission and business strategy, the dissidents’ only interest was in immediately monetizing the company’s value for shareholders, he said. Predictably, these conflicting goals led to tremendous stress and friction on the board. Continue reading

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Filed under Crisis Communications, Shareholder Activism

Activists and Boards Share Common Ground on Communications

When it comes to corporate governance, board members and shareholder activists are usually on opposite ends of the spectrum.  But at separate conferences in New York and Boston this month, the two camps expressed a surprisingly similar view about the most effective way to deal with the anticipated increase in shareholder activism in 2011: better communication.

According to a study by law firm Schulte Roth & Zabel (SRZ), 76% of activists surveyed identified “dialogue/negotiations with management” as the most effective activist strategy to achieve desired results.  None of the other proposed strategies – shareholder resolutions, publicity campaigns, proxy contests or litigation – received more than 16% of the vote.

Results of the study were highlighted at SRZ’s Shareholder Activism Conference in New York, which I attended as part of an invited group comprised mainly of hedge fund and private equity fund managers. Continue reading

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Filed under Board Communications, Crisis Communications, Shareholder Activism

Prepare for Proxy Access Now – Avoid an Activist Horror Story Later

Hello again.  We took a bit of a hiatus from blogging this summer, but we are now back to share a Halloween story sure to scare you straight! 

Unless you are one of the 33 Chilean miners that were trapped underground for the past two months, you have likely been watching the drama unfold on Capitol Hill as the Business Roundtable and the U.S. Chamber of Commerce challenged the legality of the SEC’s new proxy access rule 14a-11, which allows qualifying shareholders to nominate directors for election at shareholder meetings and requires the corporation to include those nominees in the standard proxy statement.  The petitioners claim that the new rules are subjective and violate federal and state law and the United States Constitution, and that the SEC did not assess the effect of the rules on efficiency, competition and capital formation.  As a result, implementation of the rule has been delayed pending a resolution of the Court of Appeals.  So the new proxy access rules will most likely not be implemented until the 2012 proxy season, at the earliest.  Upon hearing this news, public corporations across the nation let out a collective sigh of relief. Continue reading

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Filed under Crisis Communications, Shareholder Activism

Winning the Gunfight at the Proxy Corral – Four Steps to Prepare for Shareholder Activism

The term “shareholder activism” can sometimes send a shiver down your spine and conjure up all kinds of unwelcome events – unhappy shareholders, proxy contests, shareholder proposals, 13D filings and withhold vote campaigns, to name just a few.

I recently moderated a NIRI Virtual Chapter webinar on “Shareholder Activism Trends.”  The participants, consisting mainly of IROs at mid- and small-cap companies, were polled on several questions.  The first question was, “Do you have a detailed plan in place for dealing with shareholder activism?”  The majority answered “no.”

It may not be feasible to have a detailed plan for dealing with a threat that can take so many different forms.  The lawmen and bandits who fought it out at the infamous O.K. Corral in 1881 had no idea how the showdown would play out – and neither will you if your company becomes an activist’s target.  But that doesn’t mean you can’t be prepared.  Here are four steps. Continue reading

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Filed under Crisis Communications, Shareholder Activism