Pat Tucker is a Senior Managing Director, Garrett Muzikowski is a Senior Director, and Sean Lange is a Director for Financial Communications at FTI Consulting. This post is based on their FTI Consulting memorandum.
Since the introduction of Universal Proxy in August 2022, one of the most notable changes in shareholder activism has been the significant increase in settlements between Boards and activists. With heightened risks for individual directors in proxy fights, Boards have been more inclined to settle, and settle quickly. Counter intuitively, this has also corresponded with a time where management teams are winning decisively in proxy contests – seven of eight proxy contests held in the U.S. so far in 2024 resulted in full victories for management.
As we close out the 2024 proxy season, those in the activism defense world are starting to ask: are Boards settling too quickly?