Shareholder Advisory and Activism Defense Study

A set of vocabulary flashcards covering key terms, activist strategies, and corporate defense mechanisms based on the Shareholder Advisory lecture notes.

Lazard

A boutique and independent advisory firm that provides global resources and opportunities for analyst development and career growth.

Activist Targets

Companies typically characterized by high or proven growth/turnaround potential, strong cash flows, underperformance in share price, lagging segment valuations, or governance issues such as a captive board.

Poison Pill

A defense mechanism where, if one owner acquires a certain $50.00\%$ of stock, the company issues lower-value shares to automatically dilute the ownership.

Staggered Board

A governance structure that divides the board into classes with different election years to prevent the mass replacement of directors in a single year.

Supermajority Provision

A requirement that increases the voting threshold for major corporate actions to a $67\%$ majority instead of the standard $51\%$ majority.

TXN (Texas Instruments) Case

An activism instance where Elliott claimed the company was misusing capital by investing in overcapacity; resultantly, the firm flexed its $2026$ capex, aiming for $9$ dollars per share, and the stock price rose.

Proxy Battle

A process where a group of shareholders (activists) and the company both nominate candidates and attempt to collect enough votes to implement structural or management changes.

Universal Proxy

A voting system where all candidates from both the company and dissident slates are listed on one card, allowing shareholders to mix and match; approximately $3/10$ proxy challenges have won seats using this in the US.

13D Filing

A disclosure filed when a shareholder owns more than $5\%$ of a company and intends to exert influence over business governance or operations.

13G Filing

A disclosure for passive owners who own more than $5\%$ of a company; eligibility may be lost if the owner begins pressing on issues like ESG, poison pills, or staggered boards.

Elliott

The largest activist investor known for employing litigation and long-term engagements; notable cases include Crown Castle (CCI), Twitter, and Texas Instruments (TXN).

Starboard

A shareholder activist focused on operations and consumer specialties, with notable involvement in Olive Garden, Kenvue, and CRM.

Jana

An activist firm typically known for pushing for M&A, such as in cases involving Whole Foods and WOLF.

CCI (Crown Castle) Case

A case where Elliott targeted an underperforming fiber business and board tenure, leading to the retirement of $5$ board members and a refocus on becoming a pure-play tower company.

Index Funds

Large investment entities that focus on governance and board composition rather than operations; the 'Big 3' hold approximately $20\%$ of the S&P voting power.

Proxy Advisory Firms

Firms such as ISS or Glass Lewis that index funds rely on for guidelines and voting recommendations on specific corporate issues.

Yield Investors

Shareholders looking for stability in free cash flow, dividends, and buybacks.

Growth Investors

Shareholders looking for above-market top-line growth who prioritize business expansion over immediate valuation metrics.

Independent Director

A board member with no existing familial or financial link to the company or its management team.

Affiliated Director

A board member with an established familial or financial connection to the company.

Inside Director

A director who is also an active member or employee of the company.

ADSK (Autodesk) Case

A situation involving an SV stake where the company faced accounting fraud allegations and low margins; the firm committed to a $9\%$ layoff while facing activist demands for board seats.