Contested Virtual Shareholder Meeting – It’s a First!
We’ve discussed quite a bit about virtual annual meetings, and here’s another development – a recent Wachtell Lipton memo discusses the first contested virtual annual meeting; it took place at TEGNA Inc. The memo reports the company’s nominees were re-elected, and the bottom-line message is that a contested virtual meeting is an option. Given the stakes involved with a contested meeting, the memo includes practical considerations to keep in mind if you find yourself navigating a contested virtual meeting:
– Customization may be required for the virtual meeting platform: this may necessitate help from outside service providers
– Conduct dry runs with cross-functional teams: include IT, legal, outside counsel, proxy solicitors, public-relations advisors
– Coordinate with inspector of elections in advance: alternative means of communication with both parties will be needed, determine process for submitting all proxies & ballots before polls close
– Ensure both parties understand rules and processes
The memo also discusses whether virtual shareholder meetings provide more opportunities than in-person meetings for shareholders to vote by ballot and split their votes between company and dissident director-nominees. Activists have long called for “universal ballots” that would allow shareholders to “mix and match” votes. For now, the memo says because virtual meetings are easier to attend than in-person meetings, maybe they provide more opportunities for shareholders to mix and match their votes. But, whether the meeting is virtual or in-person, it’s still a bit of a process to vote by ballot.
-Lynn Jokela, TheCorporateCounsel.net May 15, 2020
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