2025 REVIEW FROM MIKE LEVIN:
Big proxy contests: PHX-Elliott
Significant situations: PEP-Elliott
TSLA AGM
SEC rules on shareholder proposals
Proxy advisor pressure
Delaware under scrutiny
US stakes in INTL, others
XOM retail voting program
2026 PREDICTIONS:
DIRECTORS
Will a director be voted out in an uncontested election this year for a reason OUTSIDE of attendance (re: Netflix’s Jay Hoag’s 78% NO vote) at a big US company?
The average percentage of directors getting less than 50% of the vote is 0.2% - generally it happens due to activism OR attendance. Will it happen for some other reason?
Canary in a coal mine: what will Hoag’s FOR votes be in 2026?
The average percentage of women on boards will be?
Most recent data shows a 22% drop in new diverse candidates on boards, and Damion pulled a stunning number of “Down to 2” as a common refrain for boards looking to diversify away from women. The current average number of women on large cap US boards is 30% - how far does the average move after 2025-6?
SHAREHOLDER PROPOSALS
Which company will allow the most shareholder proposals?
In 2025, Alphabet clocked in with the highest number of shareholder proposals at 13, followed by Meta at 9, Amazon at 8, and Walmart and Berkshire tied at 7.
Which one of these shareholder proponents will see the highest number of exclusions in 2026:
Activists: (23% supports in 2025)
Anti woke: (2%)
AOs / Pensions: (12%)
Woke: (10%)
Governance: (29%)
Religious: (10%)
Number of shareholder proposals that will WIN in 2026 (approx 50 in 2025)?
E vs S vs G (45 vs 5 vs 0)
Palo Alto Networks on Tuesday: 93% YES on a James McRitchie bid to eliminate its classified board, despite the company being AGAINST.
PAY
How many companies will fail Say on Pay in 2026 (27, About 1.2% of Russell 3000 companies, failed Say on Pay in 2025)?
Palo Alto failed Tuesday: 54% NO
How many post-Musk billion dollar+ CEO pay packages will we see in 2026?
Which is more likely:
Which is the SEC more likely to have to redefine to address the December 11, 2025 executive whining titled “PROTECTING AMERICAN INVESTORS FROM FOREIGN-OWNED AND POLITICALLY-MOTIVATED PROXY ADVISORS”, which asks the SEC to “consider” rescinding rule 14-8a, investigating if proxy advisors committed securities fraud (and should be registered), consider forcing methodology disclosure, “investigate” collusion with asset managers, and calling proxy advisors “fiduciaries” if they charge a fee to pension funds:
Anti-fraud laws - currently the laws deal with the “purchase or sale” of a security, not saying “this non binding shareholder proposal about donut hole size is a vote YES based on the criteria you provided”... they would have to redefine scienter to include advice for sale, not securities? Or they would have to decide that they had a coordinated scheme to defraud THE ENTIRE MARKET?
Investment advice fiduciaries - ERISA sets duty of loyalty, care, and prudence, and it applies to anyone exercising discretion over a pension for a fee - they would have to consider the purchase of ANY data, rating, opinion, or even made-to-order service (like back end data dashboards) a form of advice, and thus make them all fiduciaries. Unless they just change the rule and say “proxy advisors are fiduciaries” because kabuki theater?
ESG - they’ve included in here considering rescission of rules that “advance” ESG policies - but there’s a G in ESG. That would include literally the act of voting, the election of directors, special meetings, bylaws amendments - EVERYTHING that happens. In which case, do they need to redefine ESG to just mean “woke stuff we don’t like” (which could, in fact, mean G also)? And is every activist investor then woke?
The SEC No-Action gaslight - where they no longer will oppose shareholder proposal exclusions - is more likely to:
Result in more votes against directors - between the 13g vs. 13d guidance and the “we’re just too busy to read shareholder proposals for an entire year” guidance, and ISS [i think it’s actually glass lewis that’s moving away from recommendations entirely] suggesting they won’t actually provide a recommendation anymore, there’s not much else for investors to do, right?
Fuel a rise in shareholder proposals - and disclosure from proponents about exclusions to “name and shame” companies who are using the feckless SEC as cloud cover to avoid governance or shareholder demands.
Fuel a rise in activism - in the absence of being able to ask a company to make an amendment to a bylaw or declassify a board on the proxy, doesn’t it just make activism more hostile? If a company is underperforming, investors don’t have the SEC behind them as much any more? Coupled with Texas rules that make it harder to file proposals at all, and the move toward mandatory arbitration vs. regulatory/legal oversight, it’s all activism now, right?
Push more companies to Texas - the SEC is basically Texas-ifying guidance, but Delaware isn’t biting yet. Inevitably, do more companies move to Texas to take advantage of having fewer shareholder rights?
Musk’s mega pay package is more likely to:
Open the floodgates to mini-Musk packages - instead of 10 years and 12 tranches, expect pay committees to start putting forward 4 years and 6 tranche billion dollar packages for companies that make hydraulic presses and deli meat.
Push investors to vote against pay EVERYWHERE, since they already feel bad giving Musk so much (like after you eat too much chocolate, you just never want it again)
End say on pay - what’s the point really? Some fringe investors vote against pay, and it’s non binding? If you are excluding shareholder proposals anyway, why not end say on pay and force investors to just vote against pay committee members?
DO NOTHING. No one actually cares how much an executive gets paid, all the CEO pay ratio data and disclosures are kabuki theater anyway.
DExit winner is most likely:
Nevada
Texas
Delaware
No one
All content for PROXY COUNTDOWN is the property of Free Float Media, Inc. and is served directly from their servers
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2025 REVIEW FROM MIKE LEVIN:
Big proxy contests: PHX-Elliott
Significant situations: PEP-Elliott
TSLA AGM
SEC rules on shareholder proposals
Proxy advisor pressure
Delaware under scrutiny
US stakes in INTL, others
XOM retail voting program
2026 PREDICTIONS:
DIRECTORS
Will a director be voted out in an uncontested election this year for a reason OUTSIDE of attendance (re: Netflix’s Jay Hoag’s 78% NO vote) at a big US company?
The average percentage of directors getting less than 50% of the vote is 0.2% - generally it happens due to activism OR attendance. Will it happen for some other reason?
Canary in a coal mine: what will Hoag’s FOR votes be in 2026?
The average percentage of women on boards will be?
Most recent data shows a 22% drop in new diverse candidates on boards, and Damion pulled a stunning number of “Down to 2” as a common refrain for boards looking to diversify away from women. The current average number of women on large cap US boards is 30% - how far does the average move after 2025-6?
SHAREHOLDER PROPOSALS
Which company will allow the most shareholder proposals?
In 2025, Alphabet clocked in with the highest number of shareholder proposals at 13, followed by Meta at 9, Amazon at 8, and Walmart and Berkshire tied at 7.
Which one of these shareholder proponents will see the highest number of exclusions in 2026:
Activists: (23% supports in 2025)
Anti woke: (2%)
AOs / Pensions: (12%)
Woke: (10%)
Governance: (29%)
Religious: (10%)
Number of shareholder proposals that will WIN in 2026 (approx 50 in 2025)?
E vs S vs G (45 vs 5 vs 0)
Palo Alto Networks on Tuesday: 93% YES on a James McRitchie bid to eliminate its classified board, despite the company being AGAINST.
PAY
How many companies will fail Say on Pay in 2026 (27, About 1.2% of Russell 3000 companies, failed Say on Pay in 2025)?
Palo Alto failed Tuesday: 54% NO
How many post-Musk billion dollar+ CEO pay packages will we see in 2026?
Which is more likely:
Which is the SEC more likely to have to redefine to address the December 11, 2025 executive whining titled “PROTECTING AMERICAN INVESTORS FROM FOREIGN-OWNED AND POLITICALLY-MOTIVATED PROXY ADVISORS”, which asks the SEC to “consider” rescinding rule 14-8a, investigating if proxy advisors committed securities fraud (and should be registered), consider forcing methodology disclosure, “investigate” collusion with asset managers, and calling proxy advisors “fiduciaries” if they charge a fee to pension funds:
Anti-fraud laws - currently the laws deal with the “purchase or sale” of a security, not saying “this non binding shareholder proposal about donut hole size is a vote YES based on the criteria you provided”... they would have to redefine scienter to include advice for sale, not securities? Or they would have to decide that they had a coordinated scheme to defraud THE ENTIRE MARKET?
Investment advice fiduciaries - ERISA sets duty of loyalty, care, and prudence, and it applies to anyone exercising discretion over a pension for a fee - they would have to consider the purchase of ANY data, rating, opinion, or even made-to-order service (like back end data dashboards) a form of advice, and thus make them all fiduciaries. Unless they just change the rule and say “proxy advisors are fiduciaries” because kabuki theater?
ESG - they’ve included in here considering rescission of rules that “advance” ESG policies - but there’s a G in ESG. That would include literally the act of voting, the election of directors, special meetings, bylaws amendments - EVERYTHING that happens. In which case, do they need to redefine ESG to just mean “woke stuff we don’t like” (which could, in fact, mean G also)? And is every activist investor then woke?
The SEC No-Action gaslight - where they no longer will oppose shareholder proposal exclusions - is more likely to:
Result in more votes against directors - between the 13g vs. 13d guidance and the “we’re just too busy to read shareholder proposals for an entire year” guidance, and ISS [i think it’s actually glass lewis that’s moving away from recommendations entirely] suggesting they won’t actually provide a recommendation anymore, there’s not much else for investors to do, right?
Fuel a rise in shareholder proposals - and disclosure from proponents about exclusions to “name and shame” companies who are using the feckless SEC as cloud cover to avoid governance or shareholder demands.
Fuel a rise in activism - in the absence of being able to ask a company to make an amendment to a bylaw or declassify a board on the proxy, doesn’t it just make activism more hostile? If a company is underperforming, investors don’t have the SEC behind them as much any more? Coupled with Texas rules that make it harder to file proposals at all, and the move toward mandatory arbitration vs. regulatory/legal oversight, it’s all activism now, right?
Push more companies to Texas - the SEC is basically Texas-ifying guidance, but Delaware isn’t biting yet. Inevitably, do more companies move to Texas to take advantage of having fewer shareholder rights?
Musk’s mega pay package is more likely to:
Open the floodgates to mini-Musk packages - instead of 10 years and 12 tranches, expect pay committees to start putting forward 4 years and 6 tranche billion dollar packages for companies that make hydraulic presses and deli meat.
Push investors to vote against pay EVERYWHERE, since they already feel bad giving Musk so much (like after you eat too much chocolate, you just never want it again)
End say on pay - what’s the point really? Some fringe investors vote against pay, and it’s non binding? If you are excluding shareholder proposals anyway, why not end say on pay and force investors to just vote against pay committee members?
DO NOTHING. No one actually cares how much an executive gets paid, all the CEO pay ratio data and disclosures are kabuki theater anyway.
DExit winner is most likely:
Nevada
Texas
Delaware
No one
Founder boards, plus Zaslav’s payday, and the death of shareholder proposals
PROXY COUNTDOWN
49 minutes 13 seconds
6 months ago
Founder boards, plus Zaslav’s payday, and the death of shareholder proposals
Trade Wire - BUY/SELL
Top Stories:
The money
In response to angry shareholders:
Two weeks after 60% of Warner Bros. Discovery shareholders rejected CEO David Zaslav’s $52M pay plan, the Compensation Committee restructured his plan using Hollywood’s latest CGI, special effects, and most seasoned stunt doubles: his new plan reduces his annual pay targets significantly–from $37M to $17M if he hits 100% of his targets–but the devil is in the details as he is eligible for $37M if he reaches 200% of his targets and is getting a massive option grant of 21 million shares at an extremely low strike price of around $10 per share, giving him the theoretical opportunity to make $1.4B if Warner Brothers’ share price regains its 2021 high of $77.
To walk in the door:
Ciena Corporation’s new CFO Marc D. Graff will get $2M in cash and $10.5M in time-vesting equity.
While Arista Networks’ new COO Todd Nightingale is welcomed with $32M in equity, $30M of which vest simply over time without any performance-based conditions: an amount which is 92 times greater than his base salary.
Boeing’s longest-tenured director Lynn Good joins the Board of Morgan Stanley just two days after the crash of a Boeing 787 Dreamliner in India killed more than 200 people.
Yum! Brands CFO Christopher Turner has been promoted to CEO to replace David Gibbs. In doing so, the company skipped right over Chief Operating Officer and Chief People & Culture Officer Tracy Skeans who has been at the company 20 years longer than Chris and in her dual roles oversees two key industry areas of risk in customer experience and labor management.
Maybe we have Yum! Brands Chair Brian Cornell to thank for this decision? As CEO of Target Brian has overseen the company’s recent demise due partially to customer-alienating decisions surrounding the lack of support for Gay Pride and the sudden abandonment of the company’s DEI policies due to the perceived threats from a US election.
At Yum Brands’ annual meeting last month Chair Cornell received 17% votes against his reelection, more than 3 times greater than any other director.
Continuing to follow the trend of large cap companies with only 2 women on the board:
Thomas Frist, III is stepping down at VeriSign, a board with only two women. Will they take this opportunity to replace him with a woman?
Same thing at Nutanix where Brian Stevens just stepped down on a board with only two women
And at Live Nation Entertainment where Greg Maffei’s 33% influence just left the board.
Affirm Holdings, however, is keeping the board at two women ignore the problem by replacing retiring director Keith Rabois with Richard Galanti, keeping its board below the accepted minimum threshold of three women on the board.
And finally, Pitney Bowes has cleverly circumnavigated shareholder approval as it appointed Brent Rosenthal to its Board only a month after its annual meeting in May.
PROXY CAGE MATCH
Activist investor , which owns about 1% of Victoria’s Secret, is arguing that the company has failed to realize its potential since its separation from its parent company, L Brands, in 2021. Specifically, CEO Hillary Super “has limited chief executive and public company experience with only a brief tenure in intimate apparel.”
CEO Hillary Super (September 2024-)
CEO, Savage X Fenty, intimates retailer, 2023 – 2024
CEO, Anthropologie Group, 2020 – 2021
Global President, Anthropologie Group, 2019 – 2020
Co-President, Anthropologie Group, 2018 – 2019
President of Women Apparel, Accessories, Beauty and Bridal, Anthropologie Group, 2017 – 2018
Six directors sat on the board during the company's decline and the remaining two independent directors "have limited experience successfully scaling global consumer businesses … We believe that Victoria’s Secret requires a reconstituted Board comprised of directors with proven experience in brand revitalization, operational execution, international expansion, and shareholder value creation … “ [the retailer] should consider replacing a majority – if not all – of the Board with independent directors who bring relevant backgrounds, fresh perspectives, and a strong track record of value creation."
8F/2M
Chair Donna James, (2021-); (L Brands: the former parent company of VS&Co, 2003 – 2021)
Chairman George Mayes was voted out and then resigned at Forward Air’s annual shareholder meeting last week. Directors Javier Polit and Laurie Tucker have also stepped down despite receiving a majority vote. The Board has appointed Jerome Lorrain as Executive Chair and Paul Svindland as Lead Independent Director.
Ancora Holdings, which owns a 4.1% stake, previously said the three “unfit legacy directors” cannot be trusted based on their “history of inaction, failed oversight and highly problematic decisions,” blaming them for the company’s decision to pursue the Omni Logistics acquisition in August 2023.
VOTE RESULTS TABLE
Here are the highlights from 45 large-cap annual meetings over the past week:
30 total SHPs: but from only 13 companies, meaning 32 meetings had zero SHPs
Nearly half (13) came from Alphabet
only 3 on G
4 on AI
equal shareholder voting 31% YES (highest YES vote)
A stockholder proposal presented at the 2025 Annual Meeting but not included in the 2025 Proxy Statement regarding a report on implementing AI app preload capabilities into Android OS 0.000273% YES (lowest)
342|12,515,614,679|1
27 of 45: zero shareholder proposals and zero shareholder dissent.
Only 2 wins overall:
Fidelity National Financial: elect each director annually 93% YES
MONOLITHIC POWER SYSTEMS: call a special shareholder meeting 58% YES
7 “moral” victories (over 30%):
Alphabet: equal shareholder voting 31% YES
96.1% of Class B shares (10 votes) held by Larry Page/Sergey Brin/Eric Schmidt/John Doerr=57.3% voting power; 73% on non-class B voted YES
Marvell Technology: Independent Board Chairman 38% YES
CORPAY: independent Board chair 39% YES
Fortinet: require that two separate individuals hold the office of Chairman of the Board of Directors and the office of the Chief Executive Officer 42% YES
Fidelity National Financial: (MGMT Prop) redomestication of the Company from the State of Delaware to the State of Nevada 34% NO
Chipotle Mexican Grill: 45% NO on Pay
“One-time retention awards” on August 2024 after Brian Niccols left: $38M aggregate to NEOs
CORPAY: 47% NO on Pay
The shareholder disconnects:
Chipotle Mexican Grill: lowest director 4% NO Fili-Krushel & 45% NO on Pay
Target: lowest Cornell 9% NO and Stockton 5% NO
The shareholder connects?
Marvell Technology: Independent Board Chairman 38% YES
CORPAY: independent Board chair 39% YES
Fortinet: require that two separate individuals hold the office of Chairman of the Board of Directors and the office of the Chief Executive Officer 42% YES
The directors : 5 over 20%
Regeneron Pharmaceuticals: Brown 27% NO (classified)
Natera: Gail Marcus 29% NO; Roy Baynes 19% NO (classified)
Pure Storage: 64% NO Scott Dietzen; 21% NO Charles Giancarlo; John Murphy & Greg Tomb 18% NO (classified)
Dietzen Vice Chairman and Former CEO (2010-2017) and on Nomination and Risk Committees; referred to as "Independent"
CORPAY: Joseph W. Farrelly 26% NO
Alphabet: Larry Page 19% NO (44% NO)
Page/Brin 52% Voting Power
The oddities:
The oddities:
THE BIG VOTE PICKS
MATT
NVIDIA
Founder firm, top of its game, on any given day largest company in the world at 3.5tn cap - with no governance of its founder
Could Nvidia be the next Tesla?
Similarities:
AI meme wave - trades at a 40-50 P/E ratio, which was a 140 P/E (Tesla traded at 40-50x before they started losing money, now at a 180)
Deeply entrenched boards (more on that)
Deeply oversized pay packages
Stanford
Both immigrants
Deep relationship WITH Musk
Outsized, leather jacket wearing CEOs
Kissed Trump’s ass about tariffs
From 2018: US chipmaker Nvidia's founder and Chief Executive Jensen Huang said curbing China's technological development could not be achieved by adopting heavy tariffs.
From May: “Obviously, I don’t know all of his ideas, but let me tell you about two that are incredible,” answered Huang. "The first one is utterly visionary. The idea of tariffs being a pillar of a bold vision to re-industrialize to onshore manufacturing and motivate the world to invest in the United States is just an incredible vision.”
Deep dive into founder boards - who do we hire to work with outsized, unique, long-term founders
Defining “Founder boards”
152 US founder firms that IPOed 10+ years ago
“Mature” public founder firms
Not controlled companies - 1 share, 1 vote or no majority shareholder
Includes Nvidia, Amazon, Tesla, not Meta, Berkshire, Oracle, Nike
1,395 US non controlled, non founder firms (the control group)
Findings
Surprising things that are the same between founder boards and non founder boards
Same percentage of VCs on the boards on average - speaks to the importance of private markets
No age differences on average
No gender gap difference on average after adjusting for founder and CEO power - this surprised me
When you include founder power on boards, it definitely skews to much larger gender power gaps, but adjusted shows that if NOT for the founder, you’d have near parity
In fact, in the control cohort, the power gaps are better as soon as you exclude CEOs, too - the fact that men hold the vast majority of the top positions everywhere is THE LARGEST difference in power gaps on boards
Solution: no CEOs on boards, you’ll have better power parity
Biggest differences
Founder boards skew long tenured - 15% of founder boards have more than 15 years tenure, compared to 12% of the control
VCs stick around longer - 46% of VCs on the board stay more than 10 years vs. 36% for control
VCs in general have longer tenure
Founder boards tend to underperform on earnings, outperform on TSR
Founder boards rely LESS on connections to one another - it’s only the connection to the founder that matters
Summary thoughts
Boards operate in one of two ways: fetishize the most powerful person in the room (founder, CEO) OR as a social club (high degree of interconnectedness)
Nvidia needs governance now, not later…
Nvidia is an outlier - nearly 60% of the board is long tenured, with 33% of board more than 15 year tenures - only other company this bad is Netflix at mega caps - all of which were original investor VCs
Tench Coxe - like Robyn Denholm - has not only been around for 30 years, his shareholdings have made him a billionaire from just this company
Harvey Jones and Brooke Seawell haven’t just been at Nvidia for more than 30 years EACH - they worked together at Synopsis in the 1990s
Of the 13 directors, 8 have been on the board at least 10 years - the average tenure of the Nvidia board is 13 years, and 62% of it wouldn’t be considered independent in the UK
If our advice at Netflix was to break up the lack of independence - and investors have rewarded Netflix with a lower average vote for directors than peers (94% vs. 96% average), and the longest tenured directors get 90% routinely over the last decade
Just on its face, who makes decisions:
Ex head of marketing for NFL and former food executive (Dawn Hudson)
Ex 31 year Taco Bell executive (Melissa Lora)
Two professors (John Dabiri, Persis Drell)
Ex NASA engineer (Ellen Ochoa)
Lawyer (Stephen Neal)
Ex CIO of a drug company (Aarti Shah)
FIVE 1990s/00s tech and VC bros - all bros - Rob Burgess, Tench Coxe, Harvey Jones, Brooke Seawell, Mark Stevens - most of whom have been with Jensen Huang for 30 years
This is easy - break up the 90s tech VC fraternity block:
Vote out Brooke Sewell
Vote out Harvey Jones
Vote out Tench Coxe
PROXY COUNTDOWN
2025 REVIEW FROM MIKE LEVIN:
Big proxy contests: PHX-Elliott
Significant situations: PEP-Elliott
TSLA AGM
SEC rules on shareholder proposals
Proxy advisor pressure
Delaware under scrutiny
US stakes in INTL, others
XOM retail voting program
2026 PREDICTIONS:
DIRECTORS
Will a director be voted out in an uncontested election this year for a reason OUTSIDE of attendance (re: Netflix’s Jay Hoag’s 78% NO vote) at a big US company?
The average percentage of directors getting less than 50% of the vote is 0.2% - generally it happens due to activism OR attendance. Will it happen for some other reason?
Canary in a coal mine: what will Hoag’s FOR votes be in 2026?
The average percentage of women on boards will be?
Most recent data shows a 22% drop in new diverse candidates on boards, and Damion pulled a stunning number of “Down to 2” as a common refrain for boards looking to diversify away from women. The current average number of women on large cap US boards is 30% - how far does the average move after 2025-6?
SHAREHOLDER PROPOSALS
Which company will allow the most shareholder proposals?
In 2025, Alphabet clocked in with the highest number of shareholder proposals at 13, followed by Meta at 9, Amazon at 8, and Walmart and Berkshire tied at 7.
Which one of these shareholder proponents will see the highest number of exclusions in 2026:
Activists: (23% supports in 2025)
Anti woke: (2%)
AOs / Pensions: (12%)
Woke: (10%)
Governance: (29%)
Religious: (10%)
Number of shareholder proposals that will WIN in 2026 (approx 50 in 2025)?
E vs S vs G (45 vs 5 vs 0)
Palo Alto Networks on Tuesday: 93% YES on a James McRitchie bid to eliminate its classified board, despite the company being AGAINST.
PAY
How many companies will fail Say on Pay in 2026 (27, About 1.2% of Russell 3000 companies, failed Say on Pay in 2025)?
Palo Alto failed Tuesday: 54% NO
How many post-Musk billion dollar+ CEO pay packages will we see in 2026?
Which is more likely:
Which is the SEC more likely to have to redefine to address the December 11, 2025 executive whining titled “PROTECTING AMERICAN INVESTORS FROM FOREIGN-OWNED AND POLITICALLY-MOTIVATED PROXY ADVISORS”, which asks the SEC to “consider” rescinding rule 14-8a, investigating if proxy advisors committed securities fraud (and should be registered), consider forcing methodology disclosure, “investigate” collusion with asset managers, and calling proxy advisors “fiduciaries” if they charge a fee to pension funds:
Anti-fraud laws - currently the laws deal with the “purchase or sale” of a security, not saying “this non binding shareholder proposal about donut hole size is a vote YES based on the criteria you provided”... they would have to redefine scienter to include advice for sale, not securities? Or they would have to decide that they had a coordinated scheme to defraud THE ENTIRE MARKET?
Investment advice fiduciaries - ERISA sets duty of loyalty, care, and prudence, and it applies to anyone exercising discretion over a pension for a fee - they would have to consider the purchase of ANY data, rating, opinion, or even made-to-order service (like back end data dashboards) a form of advice, and thus make them all fiduciaries. Unless they just change the rule and say “proxy advisors are fiduciaries” because kabuki theater?
ESG - they’ve included in here considering rescission of rules that “advance” ESG policies - but there’s a G in ESG. That would include literally the act of voting, the election of directors, special meetings, bylaws amendments - EVERYTHING that happens. In which case, do they need to redefine ESG to just mean “woke stuff we don’t like” (which could, in fact, mean G also)? And is every activist investor then woke?
The SEC No-Action gaslight - where they no longer will oppose shareholder proposal exclusions - is more likely to:
Result in more votes against directors - between the 13g vs. 13d guidance and the “we’re just too busy to read shareholder proposals for an entire year” guidance, and ISS [i think it’s actually glass lewis that’s moving away from recommendations entirely] suggesting they won’t actually provide a recommendation anymore, there’s not much else for investors to do, right?
Fuel a rise in shareholder proposals - and disclosure from proponents about exclusions to “name and shame” companies who are using the feckless SEC as cloud cover to avoid governance or shareholder demands.
Fuel a rise in activism - in the absence of being able to ask a company to make an amendment to a bylaw or declassify a board on the proxy, doesn’t it just make activism more hostile? If a company is underperforming, investors don’t have the SEC behind them as much any more? Coupled with Texas rules that make it harder to file proposals at all, and the move toward mandatory arbitration vs. regulatory/legal oversight, it’s all activism now, right?
Push more companies to Texas - the SEC is basically Texas-ifying guidance, but Delaware isn’t biting yet. Inevitably, do more companies move to Texas to take advantage of having fewer shareholder rights?
Musk’s mega pay package is more likely to:
Open the floodgates to mini-Musk packages - instead of 10 years and 12 tranches, expect pay committees to start putting forward 4 years and 6 tranche billion dollar packages for companies that make hydraulic presses and deli meat.
Push investors to vote against pay EVERYWHERE, since they already feel bad giving Musk so much (like after you eat too much chocolate, you just never want it again)
End say on pay - what’s the point really? Some fringe investors vote against pay, and it’s non binding? If you are excluding shareholder proposals anyway, why not end say on pay and force investors to just vote against pay committee members?
DO NOTHING. No one actually cares how much an executive gets paid, all the CEO pay ratio data and disclosures are kabuki theater anyway.
DExit winner is most likely:
Nevada
Texas
Delaware
No one
