Proxy fights can take various forms and involve a range of issues. These include board election challenges (short slate/minority representation, or full board), opposition to strategic initiatives such as mergers (including private equity, leveraged and management buyouts), and "seek strategic alternatives/sell the company" campaigns.
Here, the stakes are particularly high, as the outcomes can redefine control of the company, its strategic direction and shareholder value. Also, contests can distract senior management from its primary job of running the company. To minimize these distractions, we organize and manage the campaign, work collaboratively with other team members including attorneys and financial PR firms, and focus management and the board's role in directly contacting the largest investors, with our team handling the majority of the investor contact functions.
Most important, we provide our clients and their advisors with our unvarnished analysis as to their likelihood of success under various scenarios. If we can help to broker a settlement that is acceptable to our client, we will do so even if this means we don't earn a large contested solicitation fee. We consider our advice and reputation to be more valuable than any fee.
Proxy Access presently is subject to a court challenge. If it survives in some form, despite the protestations of investors claiming they will use this new tool sparingly and only as a last recourse, we anticipate that more cost-effective means to nominate alternative board candidates will inevitably lead to an increase in the frequency of such challenges.