2014 Roundtable on Activist Interventions

March 25–26, 2014

Co-Organizers: Lucian Bebchuk, Stephen Davis, and Scott Hirst

The Program on Corporate Governance wishes to thank its supporting organizations: Cleary Gottlieb, Compass Lexecon, Cornerstone Research, Corporation Service Company, Davis Polk, Gibson Dunn, Latham & Watkins, Mayer Brown, Pearl Meyer & Partners, Ropes & Gray, Shearman & Sterling, Simpson Thacher, and Skadden.

The Program on Institutional Investors wishes to thank the institutional members of the Harvard Institutional Investor Forum.

The Harvard Roundtable on Activist Interventions is grateful for the sponsorship of Broadridge, Cadwalader, Wickersham & Taft, CFA Institute, Coca Cola, Credit Suisse, Deloitte, EMC Corporation, Evercore Partners, Innisfree M&A Inc., Lazard, Morgan Stanley, Okapi Partners, Olshan Frome Wolosky LLP, Pearl Meyer & Partners, PepsiCo, Pfizer, Prudential Financial, Relational Investors LLC, and Vinson & Elkins.


March 25, 2014

Harvard Club of New York City, 35 West 44th Street

6:30 pm Reception followed by dinner (Optional)

March 26, 2014

Harvard Club of New York City, 35 West 44th Street

8:15–9:00 am Registration and Breakfast
9:00–10:40 am First Session
10:40–11:00 am Coffee Break
11:00–12:40 pm Second Session
12:40–2:00 pm Lunch Reception

Discussion Topics

The Roundtable will begin with a discussion of the empirical study by Lucian Bebchuk, Alon Brav and Wei Jiang, entitled “The Long-Term Effects of Hedge Fund Activism”, and the critiques of this study put forward by Wachtell, Lipton, Rosen & Katz; Lucian Bebchuk and Martin Lipton will present. The Roundtable will then move to a general discussion of activist interventions.

Depending on the interest of participants, examples of questions that may be discussed include:

  • Are activist interventions on the whole beneficial or detrimental to long-term value? Are there any particular types of activist interventions that are more likely or less likely to be beneficial, for example, interventions that decrease investments or increase payouts to shareholders?
  • How do roundtable participants assess current marketplace practices concerning how activists and issuers engage? Could such practices be improved? If so, how?
  • How do—and how should—non-activist investors deal with activist engagements?
  • How well are proxy advisors performing in opining on activist interventions? Are there ways in which their performance could be improved?
  • How do participants assess:
    • The corporate arrangementsgoverning activist engagements, such as bylaws concerning advanced nomination bylaws and disclosure requirements for nominees;
    • The recent practice of activists offering compensation arrangements for dissident directors, as well as company responsestothis practice, such as director disqualification bylaws;
    • Low-threshold poison pills, as well as poison pills that treat Schedule 13D filers and Schedule 13G filers differently; and
    • Possible reforms of Section 13(d) requirements.
  • Are there different issues raised by activist engagements in opposition to proposed mergers and acquisition transactions?
  • Are there conflicts of interest between activist investors and other investors?

We will focus throughout the session on situations where activists have emerged and begun to engage with an issuer. Broader questions regarding the potential adverse consequences of activist interventions (and the fear of such interventions), as well as the benefits or costs of corporate governance arrangements that reduce the likelihood of such interventions, will be part of the broader discussion planned for the Harvard Roundtable on Long-Term Value Creation that will take place at the Harvard Law School on May 21, 2014.

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Background Materials

1. Empirical Work on the Long-Term Effects of Activist Interventions

The Roundtable will begin with a discussion of the recent study by Lucian Bebchuk, Alon Brav and Wei Jiang, entitled “The Long-Term Effects of Hedge Fund Activism”, and the critiques of the study put forward by Wachtell, Lipton, Rosen & Katz and responses by Bebchuk, Brav, and Jiang.

Consolidated PDF of Wachtell, Lipton, Rosen & Katz critiques and Bebchuk, Brav, and Jiang Responses

2. Materials on Activist Interventions from the Harvard Forum on Corporate Governance and Financial Regulation


Marketplace practices concerning issuers’ engagement with activists

Activist engagements with other non-activist investors and proxy advisors

Proxy contests

Dissident directors’ compensation and director disqualification bylaws

Low-threshold poison pills and advance notice bylaws

Section 13(d) reform

Shareholder activism in Canada and the United Kingdom

Consolidated PDF of materials in Section 2

3. Additional Materials on Activist Interventions Contributed by Participants

Consolidated PDF of materials in Section 3

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