Proxy Access in Action: Is This What Everyone Wanted?

November 21, 2016

In a case of first impression, GAMCO Asset Management (“GAMCO”) recently nominated a director to the board of National Fuel Gas Company (“NFG”) pursuant to NFG’s recently adopted proxy access bylaw.

As far as we know, this is the first time any shareholder has nominated a director using proxy access. When proxy access shareholder proposals first emerged, two pieces of conventional wisdom were often heard.  The first was that no activist would bother to use the bylaws, because the holding periods were too long and, even if the activist had ample patience, the payoff was too restricted – yielding only 20% of the board at best.  (If the point was simply to get another voice on the board, settlements offer a much quicker route to the same destination.)  The second was that institutional holders would never bother to find a director to put on the board, and if they did find themselves in a situation where they wanted to get one or two particular individuals on the board (and didn’t want to find an activist to do the dirty work for them) most boards would be ready to listen to their suggestions.  If only for these reasons, proxy access has never seemed that threatening a proposition, and has enjoyed widespread, if anodyne, popularity. Click here to continue reading on the Cleary M&A and Corporate Governance Watch blog.