FactSet’s Adam Kommel, Research Analyst, analyzes the trends surrounding three-slate proxy fights.
In order to "avoid shareholder confusion that could arise from multiple nominations," Casablanca Capital withdrew the three-candidate slate that it had up for election to the board of Mentor Graphics Corporation at the 2011 annual meeting. Casablanca instead put its support behind Carl Icahn's three-person slate. Later that same day, Immersion Corp., which was facing proxy fight announcements from both Dialectic Capital Management and Ramius LLC, announced a settlement agreement with Dialectic, granting Dialectic representatives two board seats. The day's developments prevented the escalation of 2011's only three-way proxy fights.
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Only 15 times in the past 10 years has a U.S.-incorporated company received notice of two separate dissident slates at the same annual meeting. Settlements and concessions are the most common outcomes, making up 11 of the 28 concluded proxy fights (counting two fights per resolved meeting, plus one concluded fight each at Mentor Graphics and Immersion). The settlement of one fight can help management prevail over the other dissident slate, but settlements also allow dissidents to avoid splitting the vote.
Only at three of the 15 three-way meetings did board members actually vote upon dissident slates. Of the six dissident slates at those three meetings, five were successful in winning at least one board seat. Four meetings saw one slate go to a vote, resulting in three management wins and one dissident win. For the six meetings where no slate went to a vote, four slates were withdrawn and eight slates were settled or concessions were made. (The outcomes at Mentor and Immersion have not yet been fully determined.)
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