Trending Down

The recent newsletter from Veritas reviewed shareholder proposals during the 2017 proxy season thus far.

Some of the interesting findings:

  • 2015 – 943 proposals
  • 2016 – 916 proposals
  • 2017 – 827 proposals

Somewhat of a surprise the most frequently presented were environmental and social, 345 proposals - close to 35%.

The three areas that were in the majority were as follows:

  • Social of which approximately 25% concerned board diversity;
  • Environmental were heavily represented and were heavily supported; and
  • Climate Change has started to gain traction

As Veritas reported, the following table provides a comparison between 2016 and 2017 of the most common type:

                                                                                             2016                          2017

Proxy Access                                                                        201                              114

Social                                                                                    160                             201

Environmental                                                                      139                              149

Political Contribution and Lobbying disclosure                   91                                87

The trending down relates to the shareholder proposals that were in the forefront not too long ago.  Examples, Executive compensation (Say-on-Pay), Proxy Access, Over-boarding.

It appears as if corporate management has adjusted well to the pressures on corporate governance due to board interest and institutional scrutiny and Activist pressures.

The major companies have gone through their process, and with time, this will filter down to the mid-cap organizations.

 

Wabash National Corporation Commences Cash Tender Offer for All Outstanding Shares of Supreme Industries, Inc.

LAFAYETTE, Ind., Aug. 22, 2017 (GLOBE NEWSWIRE) -- Wabash National Corporation (NYSE:WNC), a diversified industrial manufacturer and North America’s leading producer of semi-trailers and liquid transportation systems, announced the commencement of its cash tender offer for all outstanding shares of Supreme Industries, Inc. (NYSE MKT: STS), a leading manufacturer of truck bodies, for $21 per share. The tender offer is being made by Redhawk Acquisition Corporation, a wholly owned subsidiary of Wabash National, pursuant to an Offer to Purchase, dated August 22, 2017. Wabash National and Supreme previously announced that they entered into an Agreement and Plan of Merger, dated August 8, 2017, for Wabash National to acquire Supreme.

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Some Things You Need To Know...

Quite often we are surprised by information that becomes available.

Some Things To Note...

Activists have what is estimated at $243 billion in assets under management.

Institutional ownership of the US stock market is close to 70% of total market capitalization compared to 7 % sixty years ago.

An MSCI study showed companies that had at least 3 female Directors in 2011 financially out performed those that had none.

Nearly 25 % of the Russell 3000 lacks a female Director.

State Street Global Advisors will demand change at companies without any female Directors.

Mary Jo White, former SEC chairperson, indicated Regulators may focus on board gender diversity.

The Battle of the Titans

The recent proxy fight waged by Greenlight Capital, Inc. and General Motors Co. at the company's shareholder meeting resulted in overwhelming support by the shareholders of the GM CEO and board.

A stunning defeat for Greenlight that sought to replace three directors and split the stock into two classes – one that pays dividends, the second that awards all additional earnings growth to investors.

As reported in The Wall Street Journal 90% of the shareholders rejected the stock division and overwhelmingly rejected the three Greenlight proposed directors.

The New York Times reported that since coming out of bankruptcy in 2009, GM's has earned more than $40 billion.  Further, it has engaged in stock buybacks and paid dividends, and sold off underperforming assets.  

With this success, the stock has been stuck in the mid-thirties range - clearly frustrating Greenlight which led to this, what some would consider, an ill-advised stock division proposal. This further supports the argument that some have made being that Activists are short-term investors with no interest in long-term value.

An important point to be made – GM's CEO and board were not intimidated, stood their ground, believing in the company's long-term strategy, and didNOT FOLD.

Other major targets of Activists may follow GM's stance – the Procter & Gamble and Nestle issues will tell us more - time will tell - but there appears to be a shifting taking place.

Ref:  The Wall Street Journal Wednesday, June 7, 2017 | The New York Times Wednesday, June 7, 2017

Laurel Hill Congratulates China Biologic Products, Inc. for Receiving Overwhelming Shareholder Support for its Re-domicile from Delaware to the Cayman Islands at the Annual Meeting

NEW YORK, NY and BEIJING, CHINA / ACCESSWIRE / July 12, 2017 / The Laurel Hill Advisory Group congratulates our client, China Biologic Products, Inc. (CBPO), on the successful outcome of their annual meeting of shareholders held on Friday, June 30, 2017 (Beijing time).