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Activist Investing Today: Gottfried Talks Dissident Vetting Bylaws, M&A Panels

Published: May 16th, 2024
Keith Gottfried of Gottfried Shareholder Advisory, an adviser to companies targeted by activists, discusses advance dissident nominee interviews, 13D rule changes, corralling retail votes and M&A committee settlements.

Activists worry that their candidates will be “ambushed” if they submit to being interviewed by board nomination and governance committees, activist defense adviser Keith Gottfried explained.

Refusing to let candidates be vetting by corporate boards, however, could be a “self-fulfilling prophecy,” as the alternative, to let dissident nominees be interviewed, could result in a settlement.

“You could go and have a meeting and convince members on the Nom-Gov committee that you could really add value and maybe both sides should get in a room and talk about a settlement, because this person does have some attributes that could be helpful to the board,” Gottfried told the Activist Investing Today podcast.

Some companies have been setting up bylaws giving them the right to interview activist investor dissident candidates, he said.

“One bylaw provision some companies have that I think is helpful is to have the right to interview a candidate. I think it is appropriate to have [this] in advance notice bylaws,” Gottfried said. “This is an important decision to add someone to the board, and it is not logical to add someone to a board without interviewing them. Nobody would assume they could be hired for a job without submitting to an interview and submitting an application.”

Gottfried, who manages Gottfried Shareholder Advisory LLC, a boutique advisory firm for companies, said settlements happen regularly after activist candidates are interviewed.

He also spoke on AIT about new 13D reporting rules, corralling retail voters and how companies should think about board subcommittee settlements.

Check out the podcast with Keith Gottfried below:

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