“Proxy Access on Steroids” — Sidley Sends Formal Comment Letter on the SEC’s Universal Proxy Proposal
Kai Liekefett, Derek Zaba, Beth Berg, Holly Gregory, and Leonard Wood
On June 7, 2021, Sidley’s Shareholder Activism & Corporate Defense group sent a formal comment letter regarding the proposal of the SEC to adopt a universal proxy. We believe universal proxy, as proposed, is the equivalent of “proxy access on steroids.” Compared to Rule 14a-8 and the vacated “proxy access” Rule 14a-11, the SEC’s universal proxy proposal would confer substantially greater rights to shareholders. However, unlike Rules 14a-8 and 14a-11, the SEC’s universal proxy proposal does not contain any minimum ownership and holding requirements as well as related restrictions on the right of use. Therefore, we recommend that the SEC revise its proposal to require that a shareholder has continuously held at least 3% of the total voting power for at least three years in order to require the use of a universal proxy card.
Rankings and Achievements
Sidley Ranked No. 1 by Bloomberg for Activism Defense in 1H 2021
Sidley was ranked No. 1 in Bloomberg’s Global Activism Market Review Adviser Rankings for company-side engagements among legal advisers during the first half of 2021. Sidley received the top ranking for campaigns globally and in the United States across all measures of campaign activity — number of campaigns, market capitalization of companies represented, and cumulative size of activist stake. Sidley was also ranked No. 1 for representing companies in the Technology and Industrial sectors. This new ranking follows Sidley’s previous No. 1 rankings in the activism defense league tables of Bloomberg, FactSet, Refinitiv (previously Thomson Reuters), and Activist Insight for 2020.
Chambers USA Ranks Sidley’s Kai Liekefett and Derek Zaba as Top 5 Attorneys for Takeover Defense
Kai Liekefett and Derek Zaba were ranked by Chambers USA as among the top five attorneys for takeover defense. Over the past five years, Kai and Derek have represented companies in more than 85 proxy contests, several hundred other activist campaigns, and dozens of settlements — more than any other activism defense law firm in the country.
Sidley Named Top Activism Law Firm in The Deal’s “Who’s Helping Whom”
The Deal’s “Who’s Helping Whom” report, a review of the top law firms in the activism sector and each firm’s top three activist situations for 2021, named Sidley Austin as one of the “Top Advisers to Companies Targeted by Activists.”
Lawdragon Selects Sidley’s Kai Liekefett as one of “Leading Dealmakers in America”
Lawdragon 500 published its selective list of “Leading Dealmakers in America.” Kai Liekefett, co-chair of Sidley’s Shareholder Activism practice, is listed among the honorees. The list recognizes “the cream of the crop among M&A, Capital Markets, Finance, Corporate Governance, Private Equity, and Investment Funds lawyers.”
Podcasts
Shareholder Activism: What You Need to Know Before They Come For You
Derek Zaba
In The Leadership Journey Podcast, Derek Zaba joins Kelli McCauley of McCauley & Co. to discuss ways to keep activists at bay as public companies are increasingly targeted by shareholder activists.
Shareholder Activism, Hostile M&A, and Related Issues for the 2021 Proxy Season
Beth Berg, Kai Liekefett, and Derek Zaba
This episode of The Sidley Podcast addresses the interplay between shareholder activism and hostile M&A, including as to how ESG may impact activism. It also offers practical advice on what you can do as you prepare for a potential attack by an activist or hostile bidders.
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Publications
Interlocking Directorate Considerations in M&A and Proxy Contests
Karen Kazmerzak and Jim Lowe
The U.S. economy’s recovery has led to increased deal flow for mergers, acquisitions, minority and co-investments, and SPACs. With these transactions, as with shareholder activism, board seats are often in play, which brings the potential for board interlocks that may create antitrust issues. This article from the June 2021 issue of Sidley Perspectives on M&A and Corporate Governance offers a refresher on the antitrust considerations for evaluating the suitability of director appointments.
“Shareholder Activism and ESG: What Comes Next, and How to Prepare”
Kai Liekefett, Derek Zaba, Holly Gregory, Beth Berg, Rebecca Grapsas, and Leonard Wood
The recent successes of shareholder activists against Big Oil are one of many signs of mounting and effective pressure from investors on public companies to enhance their performance and disclosures on environmental, social, and governance (ESG) criteria. Sidley’s article provides background on the potential for increased integration of ESG in shareholder activism campaigns and offers practical guidance for companies to preempt ESG-themed shareholder activism.
Back to the Future: New Lines Drawn for Poison Pills
Charlotte Newell, Beth Berg, Kai Liekefett, and Derek Zaba
In a tale of what is old is new again, the Delaware Court of Chancery reviewed the propriety of a poison pill — a bulwark of the 1980s takeover era — but in the context of shareholder activism against the backdrop of the COVID-19 pandemic. This article reviews this development.
Shareholder Activism in the COVID Era and Beyond
Kai Liekefett and Derek Zaba
In its latest edition, Ethical Boardroom published an interview with Sidley’s Derek Zaba and Kai Liekefett called “Shareholder activism in the Covid era and beyond.”
ISS and Glass Lewis 2021 Policy Updates Now in Effect
Holly Gregory, John Kelsh, Kai Liekefett, Corey Perry, Rebecca Grapsas, Andrea Reed, and Claire Holland
This Sidley Update summarizes the Governance QualityScore updates applicable to U.S. companies. It also covers the ISS and Glass Lewis & Co. proxy voting policy updates that are now in effect for the 2021 proxy season. The key policy updates relate to board diversity and related disclosures, director tenure, board oversight of environmental and social risk, virtual shareholder meetings, ESG-related shareholder proposals, and compensation-related matters.
Risk & Compliance: Shareholder Activism in the COVID-19 Era
Beth Berg, Kai Liekefett, Derek Zaba
Beth Berg, Kai Liekefett, and Derek Zaba were interviewed by Risk & Compliance, an e-magazine dedicated to the latest developments in corporate risk management and regulatory compliance.
In the News
Reuters: “Wall Street Ready to Toast to a New York Revival”
On April 29, 2021, Kai Liekefett was quoted in Reuter's article, "Wall Street Ready to Toast a New York Revival But Trade Business Suits for Leisure Wear."
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CNN: “Starbucks Shareholders Reject CEO Pay Proposals”
On March 19, 2021, Kai Liekefett was quoted in CNN's article, "Starbucks Shareholders Reject CEO Pay Proposal in Rare Move."
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Financial Times: “Who Cares About Independent Chairs?”
On February 5, 2021, Kai Liekefett was quoted in Financial Times' article, "Who Cares About Independent Chairs?"
Agenda: “Activists Have Money to Burn After ‘Quick Pause’ Last Year”
On January 25, 2021, Agenda, a Financial Times service, wrote about "Activists Have Money to Burn After ‘Quick Pause’ Last Year" in Lindsay Frost's newest article. Kai Liekefett is quoted.
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Events
The Deal Seminar: “Hostile Bids and Activism”
February 24, 2021
Kai Liekefett participated in the panel “Hostile Bids and Activism” at The Deal's Shareholder Activism Seminar.
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