The universal proxy rules go effective in only 3 short months – August 31st, 2022. A recent article from The Activist Investor explains how the rule could significantly decrease activists’ costs to conduct a proxy contest. That means that companies & boards will be facing more threats and more distractions, and navigating proxy contest responses in a dramatically altered landscape. Now is the time to prepare.
In our webcast earlier this year, Goodwin Proctor’s Sean Donohue, Gibson Dunn & Crutcher’s Eduardo Gallardo, Sidley Austin’s Kai Liekefett and Hogan Lovells’ Tiffany Posil suggested tactical steps that companies should take in advance of the compliance date. Make sure to take a spin through the transcript if you haven’t already. Kai also emphasized that:
“We have an entire business that is functioning as profession second guessers, and they will be coming for you once they see an opening. So, you need to get ready for it and the universal proxy is just another reason to get ready for shareholder activists.”
We’ve posted memos about the final rule in our “Proxy Cards” Practice Area, and we explained the steps that companies need to take to comply in the November-December ‘21 issue of The Corporate Counsel newsletter. More analysis is available in our “Proxy Fights” Practice Area on DealLawyers.com. John has also blogged about the difference between “proxy access” and “universal proxy” – a key point.
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– Liz Dunshee