We also went out of our way to enhance shareholder democracy with respect to a transaction that does not require a shareholder vote, including facilitating Mangrove's ability to object to the transaction, by offering a "governance out" that would allow the TransAlta Board to postpone closing and exit the deal if two or more directors not nominated by management are elected at the upcoming shareholders' meeting, and by granting Mangrove a 10-day extension to accommodate its express desire to nominate
dissident directors. In contrast, Mangrove and its joint actor, Bluescape Energy Partners, are offering shareholders nothing.
Cannes this year has made a show of support for
dissident directors in Iran, namely Panahi, and Russia in unveiling its selection of films to compete for the festival's Palme d'Or prize.
If the head of $15-billion hedge fund Third Point, Dan Loeb, wants to nominate
dissident directors at Honeywell International Inc., he'll have to wait until the company's annual meeting in 2018.
Indeed, the golden leash can potentially be seen as a direct response to the independence of
dissident directors as shown in cases like Airgas.
(5) JANA first entered into a golden leash compensation agreement in 2007 in connection with the 2008 annual meeting at CNET Networks and JANA's attempt to elect a number of
dissident directors to the CNET board.
But late last night, American owner Tom Hicks declared war on
dissident directors with an attempt to block the proposed sale by replacing two of the board with his son and a Hicks Holdings employee.
The SEC's decision on November 27 to continue to prevent shareholder groups from having access to corporate proxies for the purpose of electing
dissident directors was confusing and possibly temporary.
Last week the two
dissident directors put out a statement reporting that a possible counterbidder was examining Chesterton's books.
The structure of the arrangements vary: some compensate nominees or
dissident directors for travel and related expenses, while others provide bonuses to
dissident directors that reward them for achieving performance targets (i.e., an increase in share price over a specified period or a "profit share" to the extent of the activists' return on investment in the company).
Once on the board, even
dissident directors elected after a proxy fight owe their fiduciary obligations to the company as a whole and to all its shareholders, not just to the activist that nominated them.
Often poisonous in commentary, sometimes disrespectful in demeanor, these two
dissident directors quietly but effectively intimidated other board members, including the lead director.
