More Proxy Fights Ahead


    Halfway through the year, there have been more proxy fights than in all of 2014, says Kingsdale Shareholder Services ‘2015 Proxy Season Review.’ “With a growing rift between long- and short-term shareholders, more active institutional investors, and boards continuing to underperform in a number of key areas, we expect the back half of the year and early 2016 to be just as busy,” says Wes Hall, Kingsdale CEO and founder. “Activists are attracting more capital, superior talent, and effecting change. Just as companies thought they were catching up and defending themselves appropriately, activists are set to leapfrog their best efforts again. Directors should be under no illusion that what got them through last year will get them through the next.” The most noteworthy developments of the 2015 proxy season include say on pay where a record number of issuers failed the say-on-pay vote this year sending a clear message to satisfy shareholders or they will make themselves heard. As well, in the first proxy season where majority voting policy is mandated, more directors (20) triggered the policy this year versus just four a year earlier. Boards need to be clear on how to handle the resignation process and succession planning as more shareholders demand ‘true’ majority voting, allowing them to cast votes against directors, not just withhold. This proxy season was the first to include the ‘comply or explain’ rule as it pertains to board diversity. However, nothing changed on the representation of women on boards as the S&P/TSX60 Index nudged up less than two per cent.