Shareholder Activism Seminar

About This Event
It is no surprise that shareholder activists and the companies they target are shifting gears amid the coronavirus pandemic. In particular, insurgent investors have increased scrutiny on ESG issues, executive pay, operational performance and board alignment rather than agitating for M&A or buybacks. But companies aren’t standing by as their valuations dip and they become susceptible to activists or hostile bids.
The Deal’s Shareholder Activism Seminar explores the strategies companies are employing to defend themselves amid the pandemic and how activists are approaching their campaigns during one of the biggest economic disruptions of the past century.
Speakers
Anne is CalPERS’ Managing Investment Director for Board Governance & Sustainability, reporting to the CEO and responsible for strategic initiatives across the $430 billion fund. Anne leads CalPERS’ Sustainable Investment Strategy, which includes Climate Action 100+, a global investor alliance of over $52 trillion driving business action on climate change. Anne also leads CalPERS’ work on human capital management, including diversity & inclusion and financial markets advocacy.
Agenda
The Biden administration sets in motion changes at key U.S. regulators, including the Securities and Exchange Commission and Labor Department, that will have implications for activist investors and their tactics. Expect the shift to have both positive and negative consequences for insurgent investors. This panel will look at how changes in the White House will impact regulations on 13D and 13F disclosures, activist wolfpacks, proxy adviser recommendations, proxy plumbing, shareholder proposals, ESG initiatives and universal proxy cards. How will the world of activist investing be affected by these changes, and which areas should investors, corporates or institutions worry most about?
Moderator: Ronald Orol, Senior Editor, The Deal
Panelist: Ken Bertsch, Former Executive Director, Council of Institutional Investors
Panelist: John C. Coffee Jr., Adolf A. Berle Professor of Law, Columbia Law School
Panelist: Robert Pozen, Senior Lecturer, Technological Innovation, Entrepreneurship, and Strategic Management, MIT Sloan School of Management
Panelist: J.W. Verret, Associate Professor of Law, George Mason University
As companies and markets settle into a new normal, or at least gain a better handle on their operations amid Covid-19, many traditional activist tactics, including calls for M&A and proxy contests, have returned to the forefront. With piles of private capital waiting in the wings as well as a handful of well-positioned multinational companies considering opportunistic deals, will activist-driven spinoffs, divestitures and outright sales return as they did in years past? Will companies that were unable to adjust to the pandemic be more susceptible to these tactics? What challenges lie ahead in activist efforts to drive M&A or force change at companies to improve the bottom line?
Moderator: Daniel Ganitsky, Partner, Proskauer
Panelist: Mack Abbot, Vice President, Investment Stewardship, BlackRock
Panelist: Michael Ellis, Partner, Proskauer
Panelist: Laurie Hays, Managing Director, Edelman
In recent years, activists and private equity firms have teamed up to launch unsolicited bids and director fights, combining efforts to buy companies. The practice has continued amidst the Covid-19 pandemic. At the same time, dozens of companies have installed poison pills in attempts to thwart unsolicited bidders and activists. This panel will review hostile bids, director fights and anti-takeover devices amidst an M&A environment that is bringing together private equity shops with capital to invest and undervalued target companies, whose valuations have dropped amid the pandemic dislocation.
Moderator: Ronald Orol, Senior Editor, The Deal
Panelist: Douglas Braunstein, Founder and Managing Partner, Hudson Executive Capital
Panelist: Kai Liekefett, Partner, Sidley Austin
Panelist: James Rasteh, Founding Partner, Coast Capital
Panelist: Andrea Rose, Partner, Joele Frank
More than 540 investors, responsible for over $52 trillion in assets under management, are engaging companies on improving climate change governance, cutting emissions to achieve net zero by 2050 and strengthening climate-related financial disclosures in an initiative called Climate Action 100+. Investors working through the initiative are now engaged across 33 markets and represent over 50 percent of all global assets under management. CalPERS is the convener and co-founder of Climate Action 100+ and Anne Simpson is the investor representative for North America and chairs the Asia Advisory Group. She will discuss the initiative’s strategy for engagement with boards and senior management across various sectors, regions and business types.
Interviewer: Mindy Lubber, Chief Executive Officer and President, Ceres
Speaker: Anne Simpson, Managing Investment Director of Board Governance and Sustainability, CalPERS
Corporations that are faced with activist campaigns must decide — do they settle or fight it out to the finish? When companies push back, the most aggressive fund managers turn to their biggest weapon — the proxy fight. By threatening to elect dissident director candidates or, in many cases, actually nominating board candidates, activists can often drive change. In recent months, activists and hostile bidders have sought to elect directors employing written consent solicitations or at a special meeting, in addition to the traditional annual meeting contest. How can corporations encourage institutional investors’ support or discourage votes for the dissidents, including the nomination of new incumbent board-backed directors? How have these dynamics changed as balance sheets become more pressured and markets remain in flux?
Moderator: Armie Lee, Writer, The Deal
Panelist: Jonathan Duskin, CEO & Portfolio Manager, Macellum Capital Management
Panelist: Patricia Figueroa, Senior Vice President, Gladstone Place Partners
Panelist: Yaron Nili, Assistant Professor, University of Wisconsin-Madison
Panelist: Patrick Gadson, Partner, Shareholder Activism and Mergers & Acquisitions, Vinson & Elkins
Boards and management of publicly traded companies frequently turn to bankers, attorneys, proxy solicitors and other advisers, including stock watch services, in an attempt to prepare themselves for the potential onslaught of insurgent managers. C-suite executive directors, meanwhile, play “war games” of sorts, mapping out how they would respond if an activist came knocking with a laundry list of operational suggestions. This panel will examine how companies prepare for the potential of activist insurgencies, including starting a regular dialogue with their largest institutional investors. What tools are available for companies in preparing for activists, and how can companies use those tools to actively manage their businesses to preempt shareholder unrest?
Moderator: Ronald Orol, Senior Editor, The Deal
Panelist: Benjamin Colton, Global Co-Head of Asset Stewardship, State Street Global Advisors
Panelist: Josh Dubofsky, Partner, Latham & Watkins
Panelist: Richard Gluckselig, Executive Director, Assistant General Counsel and Assistant Secretary, Regeneron Pharmaceuticals Inc.
With flawed capital allocation, misalignment of incentives and a lack of preparation for energy transition, many investors view the energy and power sector as being broken. A company’s ESG profile is increasingly becoming an impediment to institutional ownership of energy. To restore investor confidence companies in the sector are looking at their operating models, corporate governance, environmental stewardship and perhaps the most challenging transformation – executive compensation. Historically, most activists have struggled in the energy sector, perhaps due to the timing of commodity cycles and a focus on the sum-of-the parts portfolio management that does not address the underlying issues. As a sector specialist and a direct operator, Mark Viviano, Managing Partner & Portfolio Manager at Kimmeridge, will address the root cause of the problems in the sector and how to fix them.
Interviewer: Tom Terrarosa, Senior Editor, The Deal
Speaker: Mark Viviano, Managing Partner & Portfolio Manager, Kimmeridge
Proxy advisers, ESG advocacy groups and institutional investors alike continually update their governance standards. These standards, which are increasingly focused on demographic and gender diversity as well as executive pay, capital allocation and sustainability practices at the world’s top companies in 2021, are also key tools in driving activist campaigns. Reports from institutional shareholders or proxy advisers can have wide-ranging implications in determining how investors vote on key companywide decisions and how boards and management teams are composed, governed and judged. This panel will review the latest in governance standards, including recommendations, policy changes and listing standards that could drive shareholders to seek change at companies that have fallen behind the times.
Moderator: Frank Aquila, Partner, Sullivan & Cromwell
Panelist: Peggy Foran, Chief Governance Officer, SVP and Corporate Secretary, Prudential Financial, Inc.
Panelist: Shane Goodwin, Associate Dean, Professor of Practice Graduate Programs & Executive Education, Department of Finance, The Cox School of Business, Southern Methodist University
Panelist: Preston Hopson, Senior Vice President, General Counsel, and Secretary, Tetra Tech, Inc.
Panelist: Patrick McGurn, Special Counsel & Head of Strategic Research & Analysis, Institutional Shareholder Services
Panelist: Melissa Sawyer, Partner, Sullivan & Cromwell
The term “stakeholder capitalism” became a new buzzword for corporate activity after the Business Roundtable in 2019 issued a statement in which CEOs committed to “deliver value for all stakeholders,” not just shareholders. This panel will examine how the needs of a company’s management team align with the needs of those on the floor or those of customers. It will review the way companies enact sustainable and profitable practices without short-changing customers. The panel also will examine how companies manage shareholder concerns and sustainable practices and explore correlations between employee morale, share performance and customer satisfaction. Activist investing is also often in the mix, with insurgent managers often targeting corporate capital expenditures and second-guessing management decision making on key investments. Panel members will review the types of operational tactics often employed by activist managers.
Moderator: Ronald Orol, Senior Editor, The Deal
Panelist: Kathleen Camilli, Independent Director, UniFirst Corporation, NACD Leadership and Governance Fellow
Panelist: Kal Goldberg, Partner, Finsbury Glover Hering
Panelist: Sheila Hooda, Director, ProSight Global, ScION Tech Growth I and II, Mutual of Omaha
Panelist: Tensie Whelan, Director, NYU Stern School of Business’s Center for Sustainable Business
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