Communications consultant Kekst CNC recently announced the results of its analysis of voting recommendations from four major LLMs across nearly 50 recent proxy fights, comparing those recommendations with proxy advisor recommendations and actual voting outcomes. You might be surprised to hear that “AI is meaningfully more likely to articulate support for activists than traditional proxy advisors – as well as real proxy contest outcomes.” Specifically:

– AI recommended for the activist’s nominees more often than the company’s (45% of cases versus 37%)

– AI recommended for the activist far more often than the two major proxy advisory firms, with ISS and Glass Lewis recommending the company’s nominees in about 55% of the cases and for the activist in 36% and 42% of the cases, respectively

– The activist prevailed in final voting tallies only 14% of the time

From the investor perspective, Pennant AI founder Ryan Nowicki Stewart weighs in in this LinkedIn post, saying:

“AI favors activists 45%” is the wrong scoreboard. What matters is whether AI can faithfully reflect your firm’s voting policy, view and voice. An agent tuned for a long-horizon index steward might vote differently from one tuned for an event-driven fund. Default settings produce default answers, and investors’ unique voices deserve better.

But from a company perspective, this info is helpful as they consider how shifting voting dynamics might influence their outcomes. These LLMs weren’t fed any particular voting policy, so the way these recommendations came out in this test might be most indicative of what a retail holder would receive from an LLM. Complicating things, each LLM seemed to have different focus areas and biases (and even the same query yielded different results from the same LLM some of the time). For example:

Claude frequently values the relevant experience of dissident director nominees and the track record of the activists. Gemini is more likely to appreciate management’s desire to avoid disruption at critical moments – or call out when independent shareholder accountability is needed to force change.

– Meredith Ervine