Monday, April 7, 2008

Shareholder Activism - Proxy Battles

Almost every day, there is news regarding "dissident" shareholders complaining about a company's poor performance and low stock price. In today's Wall Street Journal's Money & Investing front page, there is a good article on increased demands by shareholders to place shareholders on the boards to look after their investments.

Since it is an online article, access is a problem but here are some info:

In the first quarter, 30 U.S. companies ceded seats to dissidents without proxy fights, up from 23 in the same period last year and nine in 2006, according to data tracker FactSet SharkWatch. A surprising fact is that only 32% of the cases that activist investors targeted even went to a shareholder vote last year, down from 61% in 2001.

Here is an article that discusses the O'Charley's case discussed in the WSJ:

As I mentioned in a previous post, we are not in a proxy battle (yet) and I am undergoing some standard background checks so that my candidacy will be evaluated by the board. There are some that have doubts on whether we can accomplish much through this process. Some want to nominate 2 board members. Some want a direct proxy battle from the beginning. I want to emphasize that this is really the beginning of this process and I encourage people to communicate their ideas and suggestions. I am surprise that there has not been a proxy battle but then again, the comapny has not filed financials in a while (last year) and maybe a lot of funds just gave up already and sold out. Newer buyers may be happy that the stock is above $3. That is sad because when the stock was first spiraling towards $3 in late July/August 2007, the company was "concern" enough to have an emergency cc.

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