An early example of a contest that took place within a new universal proxy card regime suggests the new system could be empowering to activists or, alternatively, that it may lessen the influence of proxy advisers, Lauren Gojkovich asserted.
On the latest Activist Investing Today podcast, the founder of LDG Advisory LLC pointed to a December contest in which Jonathan Litt’s Land and Buildings Investment Management LLC succeeded at installing one of two dissident candidates onto Apartment Investment & Management Co.’s (AIV) board, after Institutional Shareholder Services Inc. recommended for that candidate and Glass, Lewis & Co. LLC opposed both activist nominees.
Gojkovich, who advises activist investors in “high stakes” situations, said the result could start to confirm “conventional wisdom on the defense advisory side” that the universal proxy card tool will result in more activism wins. “Maybe that is true, but it is still early days,” she told AIT.
She added, however, that it also could suggest the universal proxy card, which gives investors more flexibility to pick and choose director candidates in contests, could result in ISS and Glass Lewis having less power to determine proxy contest outcomes.
Either way, she noted, any director can face reputational risk with the universal proxy card. “It seems like in early days with UPC, activists are targeting particular directors for removal, but I think there is a greater sense of unease in boardrooms that anyone can be facing this heightened scrutiny,” Gojkovich said.
Beyond the UPC, Gojkovich discussed whether she expects long-only, historically passive institutional investors to become “activated” and start agitating publicly and in large numbers at companies.
Check out the podcast with Lauren Gojkovich below: