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A shareholder rights plan, colloquially known as a "poison pill", is a type of defensive tactic used by a corporation's board of directors against a takeover.
In business, a corporate raid is the process of buying a large stake in a corporation and then using shareholder voting rights to require the company to undertake novel measures designed to increase the share value, generally in opposition to the desires and practices of the corporation's current management. The measures might include replacing top executives, downsizing operations, or liquidating the company.
Carl Celian Icahn is an American businessman, investor, and philanthropist. He is the founder and controlling shareholder of Icahn Enterprises, a public company and diversified conglomerate holding company based in Sunny Isles Beach, Florida. Icahn's business model is to take large stakes in companies that he believes will appreciate from changes to corporate policy. Subsequently, Icahn then pressures management to make the changes that he believes will benefit shareholders, and him. Widely regarded as one of the most successful hedge fund managers of all time and one of the greatest investors on Wall Street, he was one of the first activist shareholders and is credited with making that investment strategy mainstream for hedge funds.
Corporate governance are mechanisms, processes and relations by which corporations are controlled and operated ("governed").
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Fund governance refers to a system of checks and balances and work performed by the governing body (board) of an investment fund to ensure that the fund is operated not only in accordance with law, but also in the best interests of the fund and its investors. The objective of fund governance is to uphold the regulatory principles commonly known as the four pillars of investor protection that are typically promulgated through the investment fund regulation applicable in the jurisdiction of the fund. These principles vary by jurisdiction and in the US, the 1940 Act generally ensure that: (i) The investment fund will be managed in accordance with the fund's investment objectives, (ii) The assets of the investment fund will be kept safe, (iii) When investors redeem they will get their pro rata share of the investment fund's assets, (iv) The investment fund will be managed for the benefit of the fund's shareholders and not its service providers.
Trading of shareholder votes is the practice of exchanging one's shareholder votes in corporate elections for cash or other forms of payment. Trades may involve multiple shareholders with varying interests in corporate matters, but may be of particular value to activist investors or a company's board of directors.
Shareholder democracy is a concept relating to the governance structure of modern corporations. In this structure, shareholders bear ultimate controlling authority over the corporation, as they are the owners and may exercise control within their economic rights. Although shareholders own the corporation, they generally take a passive interest in managing the day-to-day operations of the company. Shareholders who are interested in actively influencing corporate affairs are called activist shareholders.
References
- ↑ Klein, Ramseyer, and Bainbridge. Business Associations: Cases and Materials on Agency, Partnerships, and Corporations. (7th Ed.) Foundation Press.
- ↑ Webber, David H. (April 2018). The Rise of the Working-Class Shareholder: Labor's Last Best Weapon . Harvard University Press. pp. 46–47. ISBN 978-0-674-91946-4 . Retrieved 15 November 2019.
- ↑ Klein, April and Zur, Emanuel. 2009. Entrepreneurial shareholder activism: Hedge funds and other private investors. Journal of Finance 64(1): 187-229.
- ↑ Hirst, Scott; Bebchuk, Lucian (2010-01-01). "Private Ordering and the Proxy Access Debate". The Harvard John M. Olin Discussion Paper Series (653).
- ↑ HP declares proxy win
- ↑ Frank Biondi Joins Carl Icahn in Time Warner Proxy Fight Archived 2010-02-18 at the Wayback Machine
- ↑ "Protecting Shareholders From Activist Proxies". The Wall Street Journal . Archived from the original on 2022-11-09.
- 1 2 Hirst, Scott (2018-04-01). "Universal Proxies". The Harvard Law School Program on Corporate Governance Discussion Paper (2016–11).
