Diligent Market Intelligence’s Advisor Awards: What leading advisors predict for the 2024 proxy season
Every public company is well-versed with the standard demands of proxy season. But what doesn’t happen every year are complex shareholder issues like M&A and activist campaigns. Companies typically can’t rely on in-house expertise to handle these issues — and that’s where advisors become incredibly valuable.
Advisors offer issuers (and activists, too) counsel with direct experience on the tactical considerations of proxy fights. They help teams navigate tense negotiations — and determine whether their organizations are best served by a settlement or by standing their ground. Advisors play an increasingly critical role as shareholder activism grows across the globe and becomes a central consideration in boardrooms everywhere.
Diligent Market Intelligence’s (DMI) Advisor Awards aim to bring clarity and context to this behind-the-scenes world of proxy advisors. In addition, through our in-depth interviews with each award winner, we’ve collected anecdotes and insights from the most memorable activist campaigns of 2023 and trends to look out for in 2024—including the increase in contested M&A activity, activism gaining prominence outside of the U.S. and the impact of the universal proxy.
What are the DMI Advisor Awards?
For the past nine years, Diligent Market Intelligence (formerly Insightia) has recognized the most prolific law and proxy solicitation firms in the activism space. The 2023 DMI Advisor Awards include representations from 16 proxy solicitation firms and 73 law firms—showing how the field is expanding in response to the growing demands shareholder activism places on companies and investors.
Rankings are based on both quantitative and qualitative valuation of proxy solicitation firms and law firms that submitted representations or were identified from regulatory filings between October 1, 2022 and September 30, 2023.
Who won?
The 2023 DMI Advisor Awards include two categories of winners:
Law firms:
- Total representations: Olshan Frome Wolosky
- Total activist representations: Olshan Frome Wolosky
- Total issuer representations: Sidley Austin
Proxy firms:
- Total representations: Morrow Sodali and Innisfree M&A Incorporated
- Total activist representations: InvestorCom
- Total issuer representations: Morrow Sodali
Advisors’ 3 top takeaways from the 2023 proxy season
Diligent shared top takeaways from proxy season 2023 in a previous blog, as well as a comprehensive report from DMI. But what key insights did our Advisor Award winners share regarding 2023 proxy season trends?
1. There’s a high incidence of M&A activism, with shareholders keen to avoid costly transactions in an environment where capital is scarce and inflation is on the rise.
“[M&A activism] ran the full spectrum: ‘sell the company’ activism, classic bumpitrage, activist opposition on the buyer side, competing bids and hostiles and two situations with former CEOs contesting significant sized deals.”
— Paul Schulman, senior managing director, co-head of M&A and activism advisory group, Morrow Sodali
“There is a significant focus on M&A-related issues from many activists, with many traditional investors voicing public and vocal opposition to what they perceive to be opportunistic bids. More institutional investors are coming forward and putting pressure on prospective acquirers to improve the terms of their offers. Such investors include hedge funds and activists, as well as traditional household names.”
— Cas Sydorowitz, global CEO, Georgeson
2. Activism is going global, with more big campaigns outside of the U.S.:
“We are seeing many more campaigns in Europe and the U.K., while Asia remains a focus point. Those will continue to grow as activists get more sophisticated in navigating non-U.S. markets.”
— Josh Dubofsky, global co-chair of Latham & Watkins’ shareholder activism & takeover defense practice
“Activism levels have remained high in many markets, reaching pre-pandemic levels, and we expect to see such levels again during the upcoming proxy season”
— Cas Sydorowitz, global CEO, Georgeson
3. The universal proxy did not result in the increase in proxy contests that we all expected:
“Many people thought [universal proxy] would be a complete game changer, but it didn't really result in significantly more proxy fights. I think the legal deadlines for nominating directors for proxy fights came at a time when banks were failing and inflation was very high, deterring a lot of activists from running proxy fights.”
— Kai Liekefett, co-chair of Sidley's shareholder activism & corporate defense practice
“Earlier in the year there were a number of settlements driven by both companies and activists because it was unclear how proxy advisory firms and institutional shareholders would treat proxy contests in the universal proxy card era. However, as time moved on it was the same story as previous years, well-prepared companies with compelling track records and strong engagement practices were able to overcome activists in overwhelming fashions.”
— Lawrence Elbaum, co-head of Vinson & Elkins’ shareholder activism practice
Predictions for the 2024 proxy season
The award-winning advisors also shared insights on what we should expect (and what issuers should be preparing for) in 2024:
Companies should increase focus on off-season investor engagement with investors:
“[Proactive engagement ensures that companies] don't have to rely on a negative vote to let the board know their points of view and that they're able to share those with the boards and management in real time.”
— Ian Robertson, CEO, Kingsdale Advisors
Activism will increase in 2024:
“Signs are pointing to 2024 being an extremely busy season, with campaigns of all shapes and sizes coming to the fore. I suspect we will also see more large-cap activism, as we have seen at Walt Disney and, more recently, Starbucks.”
— Andrew Freedman, chair of Olshan’s shareholder activism practice group
“Activists are figuring out how to exist in a world where capital isn't free. And we're at the point where companies that are still laggards now that we're past the pandemic that haven't been as on top of governance changes are very vulnerable.”
— Douglas Schnell, partner, Wilson Sonsini Goodrich and Rosati
Read the full DMI Advisor Awards report
Get deeper insights from 2023 and more predictions for 2024 by downloading the full DMI Advisor Awards 2023 report, available free here.
