Overview Of The 2014 Annual Meeting Season

A Quick Overview Of The Spring 2014 Annual Meeting Season: “The Year Of The Associates”… And Several Scary Instances Of Investors ‘Using The Clock’ To Take Companies By Surprise… And Oops… Hostile Takeover Attempts Are Back

On the whole, the 2014 Spring A-M Season was a mostly uneventful one for most companies we are happy to note.

One odd development; we saw more companies change their usual meeting dates, and sometimes their meeting venues, or even cities, than we have seen in 30 years: At least 50 companies that we know of, which created almost as many scheduling scrambles. We’re still not entirely sure why the big numbers of date changes – especially since directors’ dance cards are so hard to change. Something about the calendar? Maybe some well-laid plans to pile onto those second and third Tuesdays and Thursdays in May, as a “gadfly-proofing” tactic?

Another noteworthy takeaway; small-cap and micro-cap companies were among the “leaders” in getting dangerously low, 70% or lower votes on ‘selected directors’ and on says-on-pay, exactly as we have been predicting, now that so many of the large-cap companies have made their peace with the Corporate Governance crowd.

Perhaps the best Season-Sum-Up we heard, and one that sure accorded with our own experience, was from a major proxy solicitor who described 2014 as “The Year of the Associates.” Partly it may be because Inspectors of Election from the CT Hagberg LLC Team served at so many small and newly-public companies, but we’ve never dealt with so many total newbies to the world of Annual Meetings – on the corporate side, the outside counsel side – and on the proxy solicitation side. Not a bad thing at all for us - or for the proxy solicitor that coined the phrase – but it sure generated more than the usual number of mostly minor bumps in the road, and we do think caused many of the low-vote-getters to be taken somewhat unprepared.

The most noteworthy development of all – and something we urge readers to watch for – and to prepare for in advance as best they can – an unusual number of instances where investors with “agendas” used the clock to take companies by surprise, within a week or less of their scheduled meeting date. See the stories below for some details…

Very much apropos, and sorry to end on a downbeat note, but…Hostile takeover bids are back in a big way, along with a steady stream of successful attempts to oust sitting directors: After eliminating Pfizer’s huge but unsuccessful unsolicited bid for AstraZeneca, hostile offers accounted for 7% of global offer deal value so far this year…with Valeant Pharmaceuticals many-pronged attempt to take over Allergan currently leading the pack dollar- wise. And, according to the FactSet Shark Repellent database, there were a record 16 campaigns to unseat directors in the first two months of 2014 where the activist was granted a board seat.

These may seem like smallish numbers to you, percentagewise, but if it’s your company under the gun, your meeting, as we always say, is the only one that matters…So do be on guard, and do get your team well prepared for the unexpected, we say…just in case.