But oh how times have changed – with a huge upsurge in the successes of shareholder proposals and other sorts of ‘approaches’ from activist investors, ‘vote no’ campaigns and out and out proxy fights, which have been breaking previous records year after year. And oh how the smarter solicitors have changed their business models to suit the times.
Interestingly, the biggest winners in the marketplace since our 2007 review have been two firms that were smaller, nimbler and newer back then - and feistier and more creative than the old-guard it seemed to buyers - MacKenzie Partners and Innisfree, who are typically lined up first in virtually every real fight out there. Georgeson – an ‘old-line form’ and still one of the best-known and most respected brand-names in the business – is typically on one side of most big-company fights as well.
If ever there was a business where PEOPLE are the “cutting-tool” that decides which firm makes the cut - and where PEOPLE can actually make or break the outcome - it’s this one...So let’s hasten to note the big strides made by Okapi Partners on the fight and advisory scenes in recent years, and also to note the huge success of Alliance Advisors, which has rounded-up over 500 clients in just five years - and which has been growing 15% a year – mostly with mid-size and smallish companies who often get short-shrift from the ”big firms.” Let’s note too, the recent acquisition of the big, old-line DF King firm by transfer agent AST – and to note especially the smallish, “niche firms” like Regan and Associates and Laurel Hill, who have special expertise in proxy fights that arise in smallish companies - like community banks and old-timey family-owned firms where the biggest battles tend to play out in local or regional communities, and very often to get personal – and down-and-dirty to boot.
Our advice:
These days, companies of every size need to consider having a proxy solicitation firm that has a strong success record with companies like theirs “on tap” …in case an activist knocks on the door. Even when there are no “issues” we say, use one of them at least every other year, to keep them, and you, in fighting trim.
Very important to say, “don’t automatically cast aside your old firm...to automatically hire the firm your counsel or your investment banker thinks is the hottest gun this week” if a fight seems imminent or does break out.
Review are articles on proxy solicitation, proxy fights – and on selecting a solicitor; “Teamwork, and good chemistry is everything in a proxy contest” we advise…So use our ‘Chemistry Test” to be sure the “fit” with your company’s culture and style, and with your senior management and the board is a great one.
Then, since several firms will usually pass the sniff-test – and the chemistry test too – use our “Life-Boat Test”: The analogy is a powerful one, since in proxy fights, the need to survive as a company, and as a team, is often paramount. All of the key players need to operate in perfect synch – and often in uncomfortably close quarters, so there’s no room in the boat for anyone who does not pull his or her weight to the fullest.
This, by the way, is a good way to select any important service provider. It comes back to “people” again: If you choose the firm that leads the Lifeboat Test, the choice becomes much clearer and simpler - and you won’t ever go wrong.
