Meagan Reda and Dorothy Sluszka Publish Article in Bloomberg Law on Shareholder Activist Settlements

Olshan Shareholder Activism partners Meagan Reda and Dorothy Sluszka authored an article in Bloomberg Law entitled “Settlements Are Vital for Shareholder Activists and Companies.” In the article, Meagan and Dorothy examine why negotiated settlements have become the preferred resolution in shareholder activism campaigns and how carefully structured terms can advance board stability, governance and strategic priorities. They note that activist campaigns are increasingly resolved through settlements that offer “more bespoke solutions to address the underlying concerns that drove the campaign.” They further explain that “No longer viewed simply as a mechanism to avoid a costly proxy fight, settlement agreements increasingly shape board composition, governance practices, strategic priorities, and the relationship between companies and their investors.” Meagan and Dorothy also highlight the importance of negotiating board composition, standstill restrictions, voting commitments and M&A carveouts. As they explain, “The number of seats an activist secures; whether those seats are obtained via board expansion or the removal of incumbents; and whether the new directors are mutually agreed, picked from the activist’s slate, or are representatives of the activist are all critical details that can affect other key terms of the agreement.”