Elizabeth Gonzalez-Sussman Quoted in The Deal on How Activists Overcome Onerous Advance Notice Bylaw Provisions

Shareholder Activism Practice Vice Chair Elizabeth Gonzalez-Sussman was quoted in an article for The Deal on the director election strategies that a wide variety of activist funds are employing to maintain flexibility in light of tougher advance notice bylaw provisions that seek to complicate battles for boardroom seats. “The increased abuse of advance notice bylaw provisions to try to invalidate an activist’s nomination is leading many of my clients to be more strategic in how and when to nominate,” Elizabeth said. Of the various tactics activists have employed, overnominating is one of the most popular, which simultaneously demonstrates that their nominees bring a broad range of skillsets to the company and ensures enough nominees are available by election time. “We want a show of force,” Elizabeth explained. Elizabeth points out that companies may make changes to their boards after the activist is required to submit its candidates: “The activist may not have the benefit of knowing what the company’s final slate will be until after it submits its candidates. Activists overnominate so they can run the best candidates versus the final company slate.”