proxy advisers

How Proxy Adviser Competition Affects the Quality of Advice

By Odilon Camara, John Matsusaka and Chong Shu November 14, 2024 by renholding

Investors rely on proxy adviser recommendations to fulfill their fiduciary duty when voting in corporate elections. However, the proxy advisory industry is highly concentrated, with ISS and Glass Lewis controlling over 90 percent of the market,1 and the advice …

Why Activist Investors Are Rooting for Donald Trump

By Kai Liekefett and Derek Zaba November 4, 2024 by renholding

Year after year, the world’s activist-investor community meets at the Active-Passive Investor Summit, the premier shareholder activist conference in New York City, organized by research and advisory service 13D Monitor. Yet at this year’s gathering, on October 22, the mood …

Wachtell Lipton Discusses Compensation Season 2024

By Jeannemarie O'Brien, Adam J. Shapiro, David E. Kahan, Michael J. Schobel and Erica E. Aho January 29, 2024 by renholding

In contrast to the volatility that vexed the economy in 2022, markets rose in 2023 as inflation fell and the labor market remained strong.  Entering 2024, ongoing international instability, rapidly changing technology and the United States presidential campaign are certain …

Should We Worry About Robo-Voting?

By John G. Matsusaka and Chong Shu October 10, 2023 by renholding

Robo-voting occurs when an investment fund mechanically follows the voting recommendations of its proxy adviser in corporate elections. The practice has become easier for funds with the development of online voting platforms that a proxy adviser can complete in advance …

Contests Under Universal Proxy Rules Have Produced Mixed Results

By Sean Donahue, Eduardo Gallardo and Sahand Moarefy July 13, 2023 by renholding

There have been 12 proxy contests that have gone to a vote under the SEC’s universal proxy rules, which became effective on September 1, 2022. A review of these contests reveals several themes.

Overall Results: Activists obtained a board seat …

Skadden Discusses Recent Contests Under the Universal Proxy Rules and the 2023 Outlook

By Richard J. Grossman, Neil P. Stronski, Anya Richter Hodes and Alexander J. Vargas January 9, 2023 by renholding

The Securities and Exchange Commission’s (SEC’s) new universal proxy rules, which took effect for meetings after August 31, 2022, require the use of “universal” proxy cards in all director election contests, except for elections held by registered investment companies and …

Cooley Discusses Ruling Against SEC on Non-Enforcement of Proxy Adviser Rules

By Cydney Posner October 12, 2022 by renholding

On September 28, in an action by the National Association of Manufacturers against the SEC and Chair Gary Gensler, the U.S. District Court for the Western District of Texas held that the SEC violated the Administrative Procedure Act when, in …

Davis Polk Discusses SEC’s Final Rules on Proxy Advisory Firms

By Ning Chiu, Nicole Brookshire, Joseph A. Hall, Michael Kaplan and Richard D. Truesdell Jr. July 21, 2022 by renholding

When the SEC adopted the rules governing proxy advisory firms two years ago, then-Chair Clayton emphasized that the rules were “the fruits of a rigorous and well-functioning rulemaking process where final rules reflect and benefit from the input of a …

The Need for Engaged Governance During Existential Crises: The Case of Aerojet Rocketdyne

By Eric Talley June 22, 2022 by renholding

Engaged shareholder voting is often perceived as the linchpin of sound corporate governance. That reputation is well deserved: Even as corporate governance has broadened its sights of late to accommodate a wider set of stakeholders, the pivotal role of shareholders …

Cahill Gordon Discusses Proxy Advisers’ Voting Guidelines for 2022

By Helene R. Banks, Geoffrey E. Liebmann, Kimberly C. Petillo-Décossard, Glenn J. Waldrip, Jr. and Sarah Klein-Cloud January 17, 2022 by renholding

Institutional Shareholder Services Inc. (ISS) and Glass, Lewis & Co. (Glass Lewis) have each issued their respective proxy voting guidelines for 2022, which include a number of noteworthy revisions, summarized below. The ISS updates are available here and will apply …

Wachtell Lipton Discusses Compensation Season 2022

By Jeannemarie O’Brien, Andrea K. Wahlquist, Adam J. Shapiro, David E. Kahan, Michael J. Schobel and Erica E. Bonnett January 11, 2022 by renholding

U.S. companies continue to demonstrate resilience following another year in which the pandemic imposed itself on world events. Although 2021 did not deliver a full reopening, corporate activity thrived in spite of ongoing uncertainty around “return to work,” building on …

McMillan Discusses Key Considerations in Implementing Shareholder Votes on Climate

By Ravipal S. Bains, Gavyn Backus and Andjela Sabet August 2, 2021 by renholding

As the momentum of shareholder engagement on climate-related matters continues to grow across the globe, including in Canada, these issues remain a key focus area for public companies. One of the tools that has gained prominence is the so-called “Say …

Creating Controversy in Proxy Voting Advice

By Andrey Malenko, Nadya Malenko and Chester S. Spatt June 14, 2021 by renholding

Proxy advisory firms have emerged as major players in corporate governance by helping to address the public goods aspects of information production in corporate governance. These firms provide both a) recommendations on how to cast proxy votes and b) research …

SPAC vs. IPO: Is There a Difference in Executive Compensation?

By James F. Reda May 20, 2021 by renholding

An emerging company in need of capital to grow has an important decision to make: how and when to raise the necessary capital.

The traditional way of taking an emerging company public in an initial public offering, or IPO, is …

The Politics of Institutional Shareholder Voting: Transparency Before Reform

By Isabel Verkes August 13, 2020 by renholding

On July 22, the SEC finalized a sweeping rule change to enhance the transparency around the role of proxy advisers. This follows an earlier proposal to reform the process for including shareholder proposals in a company’s proxy statement.^[1] These …

The New Civil Code: ISS and Glass Lewis as Lawmakers

By Neil Whoriskey July 28, 2020 by renholding

ISS and Glass Lewis have arrogated to themselves the power to make law, promulgating a civil code of astounding breadth and detail, ruling over decisions on board composition, director qualifications, term limits, majority voting standards, executive compensation, capital structure, poison …

SEC Chairman Speaks on Amendments to Proxy Solicitation Rules

By Jay Clayton July 27, 2020 by renholding

Good morning.  This is an open meeting of the U.S. Securities and Exchange Commission, under the Government in the Sunshine Act.  Today we have two items on the agenda, both continuations of our ongoing work to modernize and enhance the

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The Competitive Landscape of the Proxy Advice Market

By Chong Shu June 25, 2020 by renholding

Despite long-standing efforts to understand the proxy advice market, there is no way to identify the firms that supply specific investors with proxy advice, making claims about market shares conjectural at best. Nevertheless, it is widely believed that ISS and …

Why Proxy Advice Might Be Slanted

By John G. Matsusaka and Chong Shu April 30, 2020 by renholding

In the last two decades, the proxy advice market has consolidated into two companies that some believe control as much as 97 percent of that market, leaving little diversity in available advice. The companies, ISS and Glass Lewis, are opaque …

Mapping the Landscape of Comments to the SEC’s New Proxy Rules

By Jens Frankenreiter March 4, 2020 by renholding

In November 2019, the Securities and Exchange Commission (“SEC”) issued a notice of proposed rulemaking aimed at the roles played by proxy advisers in providing information and voting recommendations to clients. The move was preceded by substantively similar interpretive guidance …