Proxy season so far, with Matt Moscardi

Welcome to shoulder, Primacy from free float media. A podcast about activist investing Securities Law, and all the ways, the financial and legal world's intersect and Collide in real life. I usually and Lipton, and I cover this, she's the law professor at Tulane, but Anne as has one more weekend to travel. I think it was family or personal this time not a conference, if, as much as I envy are going to conferences. So, instead, Matt Mascari, our producer, collaboratory and friend, and I are together here to talk about kind of what we've seen so far for the proxy season. 2025 it's getting kind of interesting in some really unusual and unexpected ways. Matt say Hi, how are you doing? Oh, I am lovely Mike, it's good to be back. It's I I missed you terribly. Yes, I know. Well, I talked to you weekly as we were every single podcast but actually having having a chance to for us to talk about what's going on in the world, there's always kind of fun. So Matt follows, you know, activism and Corpus of from a slightly different angle than what Anne and I do. And of course you know follows You know, developments and legal Theory and statutes and so forth. And I look at proxy contests and financial activists and who's crapping all over whom, but Matt through his through free float analytics, and his podcast proxy counter, and also business pants that he does with business partner, Damien roles, mostly follows, you know, hardcore Corps gov stuff related to boards and so on and we can talk about that a little more but he also has some of observations views ideas about what he's seen. So, we thought we'd kind of compare notes about what's going on. I have some dad. I was going to talk about but Matt, what do you what do you got for us? What have you seen so far in proxy season 2025? Well, I won't bury the lead. This is the year of the activists. This is your moment to shine, you know, feeling so warm. It's great. I mean that's all the data basically. Even the data I'm going to talk about later and just for point of reference for anyone who's listening like we what we track is direct your performance data. We track director demographic, data their skills and all that kind of stuff boards and directors, Moneyball for boards. It's Moneyball board as a team and a director is a player. That's right, that's right. And and we all the podcasts we do. Business, pants, are proxy countdown. We're tracking all the news. In fact, there's a lot of overlap between the news that you're reading that we're reading. We just have wider breadth of news that we're covering and everything points to like activists are the last Bastion of governance right now. Like like there's sort of been, I know you've talked about on this pod, you know. Rational, apathy talked about, like, all of this sort of like, long-standing cultural habitual, voting of investors, but the rise in activism at the beginning of this proxy season is actually moving. Averages for how directors are getting what you're saying in your in your director metrics? What we're seeing in the data so we can get to that in a second, but it's yours. It's your moment to shine. All right? Okay. Well, let's, let's talk about some of the Aggregates that we've started to see. And again, you know, we talked about proxy season and again, I think I've shared this with you, I don't love that term. It makes it sound like you, but it's like it doubles down the sports analogy. Yeah, that's fine. That's fine. I just, I just, you know, activism is is kind of a year round just kind of thing, but there's there's annual meeting season. Yeah. So in terms of the hardcore stuff you know, proxy contests Activists looking for board seats. One of the sources I happen to like is is a quarterly report from Barclays Investment Bank and Jim Rossman their does a nice job and kind of bringing this together Barkley's just sent out their quarterly a week or so ago. They report a 43% increase in active as projects this year relative to 20204 and again you know everyone has different Ways they count or don't count a project. I tend to be a little more strict about it, looking for proxy materials, being filed with the SEC. But anyway, however Barclays counter. The 43%. Increase this year over last year is significant and they, they asked to do a global report. I really think only mostly about the US, they reported that there are like 40 active or 40 companies that were responding to activist campaigns as a March 31st, which is a large number. And in fact, they said that they were on track to match or even exceed, the previous high of a total of 144 campaigns for 2022. Which I think, you know, you know, we can talk about the impact of this and how it's affecting companies and so forth. But just in terms of numbers of situations, this this feels like a lot. There's a lot to try to keep track of so I, yeah, I mean, we're matching we're matching up the post-covid activist boom. Yes, like exactly which which is not and this is not driven by a pandemic. This is driven by basically, you know, corporate performance. Yeah, Elders. We'll talk a little later about how the universal proxy card. Finally, you start people getting used to it and I think it's affecting not only the number, but the types of contests actually, we'll talk about that for a second right now. So I think, you know, I have a little kind of side hobby where I track, actual contacts because I'm kind of curious about how Universal proxy card attacks voting, how just, you know, usual shareholders funds and Division I guess vote in direct or elections and so I have this little thing I track and so I have on my little roster that there are 30 pending contests. Right now as of actually an hour ago and that's a big increase over what, I what my little roster had for 2024, for last year and we can break these down a little bit and some really interesting ways. So, out of those 30 pending contests 14 of them, almost half, have an activist that is seeking all available board seats that are up for all action. And that's kind of unprecedented. That's a lot. Yeah, for an activist to try to elect every available directly when I say available, I mean, you know, for some boards, it's the whole board, you know, you got a board of eight, I don't know. And they're like, they're nominating eight people, but you know, many of these are classified boards. So there's three or four people out of a class this year out of maybe 12. And so there are activists that are seeking the whole class. So 14 almost half are seeking the whole thing. Another eight are looking for a majority of the available seats. So you know, a board of 11 they're looking for for six or a class of four, they're looking for two or more, okay? And that's also big because the proxy advisors look at majority slates little differently than everybody else. Shareholder voters. Tend to look a little more critically at activists are looking for majority so 22. At least 30 are looking for a majority or better. And that's a huge increase just around that out. Another six are looking for less than a majority and then only two are seeking, just one seen it used to be pretty standard that an activist would look for maybe one or two seats but for, you know, all, but two of these to be going from multiple seats. And for well, over half to be looking for a majority is is a significant show of assertion of strength or of power here in these. How many of them are repeats? Because I know the number of the activists are the are looking for seats or increase number of seats, right? At companies that they've been involved with or had other activists involved within the last five years, only two or three. One of them are going to talk about in a little while. There's a really interesting one, they do notice that there seems to be a trend that they're targeting a lot of them are targeting classified boards or oh yeah, with like weird governance structures to begin with, right? Which, which, actually prohibits them for from looking, you know, for, for majorities, I wonder. How many of them would actually go for the majority, if not for sort of the governance governance, restriction. It's hard to tell ya. So we can also look, you know, I, in addition to those 30, the preliminary results seem to favor, the activist I was tracking There have been seven proxy contests that actually went to an actual vote. Um, by now and again, we're going to start seeing a lot more votes as you can expect in the next month or two. But up till now, there were seven, that went to a vote, activists won all of what they were looking for, are most of what they were looking for, in three of those. And that includes contest. I love talking about in the past, Massimo or Pilot and Capital One, two out of two seats. And that was also the one where mantle Ridge, which is pehoe fund, one, three out of four seats. They were looking for at Air Products, those were two kind of you know interesting contacts with with really effective activist investors, the company won all seats in three out of those seven. So the activists got nothing including a real unfortunate. One at barrington's at a company called Matthews and actually got the endorsement of both ISS and glass Lewis and the Had come in at kind of the 11th hour and made a bunch of promises to shareholders and shareholders, you know, thought enough of those promises which in my opinion were kind of empty to reelect the entire board. I'm pretty sure barrington's just want a single seat. So in contrast, if you look back at 2024 in 15, they're only 15 content. You know, the thing we kind of forget is, you know, we hear about activism all the time at least in Prior years. There's just not that many proxy contest that that, you know, go to an outcome. You know, sometimes it's seems like there's dozens or more, but in 2020, there were only 15 where we got to a voting outcome. And in 11 of those activists got nothing got zero seats in two of them activists got a couple seats some of what they were looking for and only two out of 15. In all proxies in 2024, did activists win all the seats they were looking for. So it was really interesting difference. So far between what we saw last and what we're starting to see this year between Premier results seem to favor activists and a lot of the, you know, 30 contests. Now, there's probably a few more there going to become public pretty soon. So there, as you said echoing, what you said, there's, there's a lot of, you know, perspective activity here. This seemed to favor in a what activists are trying to accomplish. So, what's interesting about it, too, is because activists, as an activist, you thinking in a binary way, right? Like, you won the contest or you didn't win the contest. You want to see, do you didn't win the seat, but from a vote percent way. So the data that we have, right? There's roughly 120. So votes that have happened for us companies so far this year, go ahead? Yeah. That I have data on, right. I think there's more but the data lags so but the average vote for directors is 96%. Historically, it's basically state that way but this year, so forever been that way forever literally forever. But this year so far, it's 94%, and it's driven almost entirely by companies that have been targeted by activists because they directors are getting less support at companies. Targeted by activists even when the activists aren't winning. In fact, Activists who are doing shareholder proposals on top of or in, you know, like solely or in addition to director votes, they're actually getting 10% more vote averages, they're not winning them all but investors are looking at them and say and backing them more like more and more investors are backing them. So the reality is even when they're losing their winning, right? Like because they're if you view any activist campaign is a multi-year campaign, right? You have primed the pump for next year, by reducing the share of investors, we're voting for those directors this year and you started building a case with the shareholder basis. You started building some trust, some credibility with the shareholder Basin you know contrary to kind of common conventional wisdom. A lot of these activists are multi-year holders of shares. You know, sometimes they traded and now they'll trim their position. They'll add To it. But a lot of the time is visible. Talk about one of the little while they've been around for a long time and they're not going anywhere. And so you know companies make a mistake by thinking, okay? We kind of prevail they're like math Matthews. Okay, I know that I know the folks at Berrington, there are very tough and they're not going away. And so, I mean, Matthews is making a big mistake if they sort of think, okay? We we kind of beat them back and won the three seats they were looking for. No, no, bearing. It barrington's, it's unlikely that it's gonna walk away from this just as a result of, you know, this one, this one director vote. I mean, there's also the fascinating like, sort of themes emerging from the activists, right? Because we talked about the fact that a lot of these are classified boards or more of them, sure than has been passed. But on top of that, right? Like, they're getting more support. They're targeting poor governance governed companies, right? Like by traditional governance standards on top of just performance standards, right? It's not just their underperforming. Its you're seeing a lot more diving into who the directors are. In fact are that's an artifact of universal proxy. Make the make the compression making individual cases now, right? And and so you're seeing Like more approach approaches against existing directors and for their directors on a case-by-case sort of, you know, Merit basis. And, and it's dovetailing with so far this year and the votes that have happened that we have data for the G driven governance, driven proponents like the John Chavez of the world, the Ken Steiners of the world like these long time like get you know, simple majority voting, you know, like just traditional no anti poison, they're looking to make their looking to improve some of the basic governance terms basic stuff, right? Yeah, right. Those proponents are getting nearly on average, 50% of the vote up from 42 and a half percent of the vote last year. Meaning investors are effectively looking for activists to find the companies where the governance might be worse than everywhere else. They are paying attention to it. They are voting more in favor alongside the activists in terms of both wins and the average vote for and governance. Proponents in general, are seeing more and more favorability. Meaning The shift is now, I think. Activists are the tip of the Spear of governance and these proponents are laying the foundation for basically change and investigation for these longer term improvements. Because governance changes are definitely something. That's not going to, it's not going to move share price this week. It's something that's going to help you and the other observational make. And then I want to talk about some specific specific individual as we'll say situations is you're working the stats, you're kind of tossing out. Here are based on a very large data set, okay? So this is really incredible. So for you to say that, you know, support went down from, you know, 906 or 907% for the average ports, support down to, you know, bologna 85 or 94.93 or, but whatever. That space. And that's significant. It's a lot. Yeah. It's actually in a, and as you said before, as in a, in a rational, apathy environment. Yeah, those little changes and we, I know this from Speaking two directors themselves, they hate hate when somebody else in the boardroom got a higher vote share than they did, even if it's 1% and there's a lot, a lot, a lot of comparisons, like a lot of measurement contests there is, yeah, there is some measuring. Yes. And it's and it's and it's like it affects how they view the job. Like how they interact with their peers. We know the PWC surveys of the boards. Every single year, the last survey found that on average every board thinks at least one director shouldn't be there, right? There's there's a lot of, a lot of a lot of criticism that they that they'll kind of tell that report in a server that they may not actually tell the directors, right? It's classic team stuff, right? Like yeah, that guy's always sucked it. This is like Middle School. All right, why don't we? I said we there's a bunch of individual contests. We can talk about. Then we can talk about some of the other Trends and ESG and governance. But let's do that after a quick break and then we can return to talk about, you know, more of the corpse gov gov developments here at shareholder Primacy. Shareholder Primacy is brought to you by free flow analytics.com. The only free database of corporate directors, their influence and their performance Fiona stock, are retirement plan go to freeflow analytics.com, and look up, which of your elected directors are performing well and which aren't use your vote in the alternative democracy and get your data at free flow. Analytics.com. Now, back to the show, welcome back to shareholder Primacy. I'm Mike Levin talking here with Matt mascardi of free float, media about what's going on so far in proxy season 2025. So we've talked about some of the Aggregates but there's some really interesting stuff going on. That's kind of behind all this for some individual situations that I thought we would we would kind of talk about a little bit the the big contest. Everyone likes to focus on kind of one or two. That looks like it's kind of emerging unless they settle. This thing is our favorite Elliott management badass active us running approxi contest at Phillips 66 PSX. Now, the background on this is, you know, PSX is just, you know, been sort of an underperformer for a while, and so Elliot, you know, you can't do that without Elliott, sniffing it out or somebody like that. So, Elliot sort of on the surface, just nominated for directors and PSX is interesting as a large. You know, oil and gas company, you know, S&P 500 company, it still has a classified board, which most larger companies have kind of departed from anyway. So Elliot, you know, in March on deadlines nominated for people and right away, PSX started rearranging its board. They said like two people aren't going to stand for election. So the classes were all uneven and right away, you can't do that, to Elliot Elliot marched, right? In a Chance Record and sued their butts off and said you can't do this. So there was a lawsuit, I pretty sure the lawsuits on hold right now because according to the defendant of proxy that Phillips 66 file, there are now four seats. So the original class was kind of preserved, but now there's a couple other interesting things going on. Phillips put on the ballot, a declassification proposal to say, okay, we're going to declassify the board. Great Rara. The problem is, is that that requires shareholder approval of all things, you most companies can declassify just by, you know, changing the bylaws. Well, this particular set of governance documents by laws and strategic of incorporation or Charter requires an 80% supermajority to change this. And evidently Phillips has tried this, like, six times to try to get this majority or this this amount of Cheryl holder turnout to change this and it's fails every time. And I would question actually wrote about this in a post little while ago. I would question how seriously Phillips is actually trying to do this. Oh yeah, but this year, this year giving the attention, they may get the turnout that they need. and then, Elliot had a really clever way to try to get around this, you know, Elliot when they submitted their nominees, you know, back in February or March, you know, wasn't didn't know what other proposals would be out there. And didn't probably wasn't aware that Phillips was going to be putting up with this declassification proposal Elliot proposed. And this is a predatory proposal, so it's not actually buying but they recommended that there be a mandatory annual director resignation so every time a director is appointed or re-elected. They submit a kind of a standing and Evergreen resignation letter. and so, Ah, they were trying to get around this 80% supermajority by saying that there is a this mandatory director resignation annually. No one had ever, really seen that tried before as a way to kind of get around classified boards but that's a proposal that's out there and and, you know, given Elliott's kind of power and they're willing to spend money and that's kind of stuff. I would give that a pretty good shot of succeeding, as well as with the declassification. So, this one, I think the message here is, this one is getting really complicated. It's getting really heated. I can't no one. I can't see this settling in anytime. So, I got a question for you. Go ahead and this is sort of a philosophical question, because Ellie is pointing out basically structural impediments, and the board us to approve in like his board and like, all the, all the tricks that they use the board, affectively has to approve at some point. Why do you not see activists or even investors in general, if you Assume Elliot pulls something out here. Why do you not see them? A Target, these same directors at other companies because I mean like there's a cultural thing, right? Like according to our data the Phillips 66 board there are mature Blue Chip us company. They've been around for bajillion years. The average director on this board is connected to one and a half other directors on this board through nonprofits other boards like business ventures. It's definitely pretty insular that way. All right. These are like insular boards. It's like Exxon. It's like most of the like oh the mid a lot of the Midwest companies are like the Abbott Labs. The you know the Boeing's the like like these traditional large US mature companies, why do you not look at this board and say, well forget the classified nature of it. What about a vote? No campaign on these people on multiple boards. Almost all of them vote, no campaign somewhere else. What about tracking? The people who are sort of coming, why does that not happen that much? Because I Have a couple of thoughts about that first. You know, most activists online lines that we've been talking about, you know, the Elliot's, the Starbursts and so forth, the kind of resources they pour into an individual project are really considerable. All right, so they're not going to just Target another director and other company. Unless there's Or Target the same directors. Same, you know, half you know, three directors at Phillips and they say, okay, let's see. What are the boards? They're going to be on, okay, they may eventually Say, okay. You know, there's there's two directors here that are awesome, the same board and some of the island gas company. We're going to use that to our advantage. You won't see that for a year or two. All right, you know, they're they're not going to try to make life hard for that direct those couple directors at their other boards, unless the value proposition of those other companies is sufficiently compelling. Okay, there. And I've seen that happen a little bit where you're going to try to, you know, we exert some pressure on some directors by saying, okay, we're going to do it, but they're not going to be very public about it. So so it's it's definitely a tactic that someone that one or another fund has. We'll try to do. But you're not going to turn it into like a full-blown, you know, proxy contest. It's some at some other place again. Oh yeah. The most is going to happen is, you know, maybe a vote. No. Yeah. That's, that's what I would think. I would think like, you know, like on the Phillips, 66 board like, Glenn Tilton's on Abby and Phillips 66, right? He's got 13 or 10 year at both places and you have know, if you're if you're Ellie you don't have necessarily an economic interest in Abby, you have it in Phillips 66, but if Tilton's not up for a board seat, this year, and he's part of a board that sort of like, you could vote do vote. No, just, you know, prep 14, a, at any company, where these directors are on the boards and say, look, these are directors that have a track record of obfuscating or of, you know, avoiding dealing with shareholders, you know. Here's the evidence from this other board that they're on. I'm surprised it doesn't happen. I know there's some you have to do some effort, right? So just recommending voting know, it's Some other company is probably not going to be. Very accretive to the portfolio. Know. But in a short term, But it is leverage, right? Like right. You know like Elliot has platform and these directors don't and I do think there's a social stigma. If inactive is targets you as an individual and not the entity of the company and that changes the ten that could start to happen. And and the idea that that data is now available. You know, you, it makes you in front of it. If you want. Give us a call, do it. All right, let's talk about a couple others that were kind of in the data here that we're just really interesting. You asked about kind of repeat contest, there is one out there at a company called Zephyr, Pharma a little microcap. It's a sort of this kind of bumping along failing, not failing, but you know, not great pharmaceutical company and it was the subject of a proxy contest. One of the first kind of successful products, he contested a couple years ago Under Universal proxy and there was just individual investor. I've talked about you know, on podcast and so forth before a guy that Dan man glass who's a card dealer in Green Bay Wisconsin but he's done really well for himself and he's got you know, some some resources and he ran this kind of Guerrilla proxy. Contested zepra love in 2020. Um and he he nominated two directors, he used social media, he targeted just the right institutions, the proxy advisors both recommended against him. And he won, he won like going away. He won like 75 or 80% of the votes or something like that. That's, you know, it's a testament in part to how badly the company was doing but they, you know, he hired, you know, kind of a regional offer. And a proxy solicitor that barely, anybody knew, okay? And just totally totally dominated this one. Well now fast-forward two years he's back the company still isn't doing that great. So he's Jason repeating again looking for two more boards seats. And what was kind of interesting there, you know, and we'll see what happens. I think the company hired a different solicitor and they're going to try to do this a little better. One of his nominees was the principal of the proxy solicitor. I had never really Reagan or something Regan and Company. And there's, you know, people in the proxy station World, know this this farm and this person by no one else that I talked to know. So that's, that's a person's actually a nominee for this board. And what was the other interesting part of this was that? There was no kind, you know, the reason mangoes can do this is because in 2023 He won the two seats, kind of outright in an election. So there was no settlement agreement. There was no standstill, there was nothing preventing him from kind of coming back. And that's, you know, that frequently happens is, you know, we read about all these settlements so which is good, you know, it kind of, you know, avoids a little bit of the heartache of a proxy contest and allows the directors start, you know, paying attention to the company. But one of the problems of the settlement at least for an activist is you really? There's a lot of rules. Yeah, right. Trading in and out of the stock. You can't communicate with anybody. You got to vote on with come. There's a lot of stuff you got to do. Well, he had none of these restrictions on him so he was able to come back and how many two more directors. So, that meeting is not for a little while it's oh, it's actually sometime this next month and I think the company saw us to announce the actual date. So we're going to know the result of that pretty quickly. You know, that was the Case you know the repeat activist was the same thing with Massimo and pollen which we talked about a little few minutes ago, where pollen had won two seats last year and because they won their seats out right. There was no stand still, nothing preventing them from coming back and getting two more seats. And we've talked about that before about how now pilate and no one has a majority that board under X Factor there. Strikes The X Factor there strikes me as if I SS and glass Lewis flip, right? Like if he won in 2023, he did well by investors. Then it was a landslide. Now, it's harder to take him less seriously. Yes, you know, and I wonder if they flip and support him in this time, I would actually see that. All right, there's a couple others that we can talk about the one I wanted to really mention was one that just got announced in the last, like, week or so, at our old favorite All-American company, hog, heart Davidson and an activist that I know called heart Helms by a guy named Ray Ray Hanford. Is a really good under the radar kind of activist, but very effective has done some couple of projects, very concentrated portfolio. You know, two very successful activist projects in the past Tempur Sealy. And it also at Six Flags, they've been a long time investor in hog and it was actually interesting. There was, I don't know if you saw this week and I know you were loud, but there was a whole kind of tell-all in the Washington weekend. Wall Street Journal about Harley Davidson and, and each partner's and you know, there's a heart had a director that they had appointed to the board in 2022 as part of a settlement. There was a lot of disagreement about CEO succession. So that person very noisily resigned their seat like about two or three weeks ago and what was really interesting is each Partners, you know, missed all the deadlines for being able to, you know, nominate more directors and try to run a Proxy contest here. So what they're doing is something that's a little unusual but not, you know, maybe come more common was a vote. No, you know, withhold campaign. Again we've talked about that you can recommend it's over. But there actually doing a solicitation again three A incumbents on the hog board of directors. So there you know, they're not going to be able to appoint, you know, who they want. They're just saying okay we're going to tell the shareholders to vote against these three. It's the board. The independent Elite inventor and two others. And and so the outcome there could be and it's hard to tell, you know, this early the outcome there could be that these three, you know, don't win the majority and each Partners is going to put some resources into this. This isn't going to be just, you know, a vote know. They're going to really solicit hard especially because, again, they have a real concentrated portfolio. This is a big part of their, their assets. And they're going to want to really, really do well by their limited partners. So if those three don't win a majority, they have a mandatory resignation policy. It's brilliant, so they'll have to have to resign. Now what the company does with that is is to be TBD, you know, most of the time mandatory resignations as a result of not getting a majority vote, just create zombie directors. So you know, maybe I'll go say, okay, you can stay on or I don't know or whatever I'm speculating that that each partner have some influence over those next three. Um, so again, that's not actually a proxy contest, but that's a solicitation for withhold that will have to see how that goes. Well, the solicitation like the the process they're going through, it struck me when I read the letter, right? Like is the language they use because they're targets, are zeets the CEO and chair. And then two other directors who are longer tenured, but the way they write about it is they're targeting those directors, because of entrenchment and quote, exerting undue influence over the board, you know, the CEO succession process, right? Which is fascinating because it's a record. It's like a social recognition that there are a few people who are effectively running this and the rest of the board is semi or totally marginalized including the age Partners director including their own director which, and they're getting that from the inside, and there's the sort of whistle blower, you know, aspect To this. So there is a, this fascinating, sort of what I like about this content contest is there's a it's almost a social contest, right? Like if you can't nominate your own directors, you can't make your traditional pitch of this company's underperforming. And, and here's all the reasons why you should vote for these. You know, directors, over the existing ones, they are taking the approach. That's almost like what I was saying before, which is like, well, these three directors are effectively controlling the board, and they're exerting undue influence. And there are and we see a situation in which the company is not pivoting, the way it needs to, we don't need to like, do a, you know, replace them with our candidates. What we need to do is get rid of Credo influence vacuum, change the social dynamic in the boardroom and that's what I think that's that's in part. What what age Partners is trying to accomplish here so and there's a bunch. More is we can talk about, but you know. Well, we'll do what that in another time. There's there's some other other things in proxy season. That we we should probably address here. There's some other Trends in developments that, you know, depending where you sit may not be quite as positive as what we've been talking about kind of for financial or hedge fund or activists and this has to do with a definite chill. In what's going on in sort of The Proposal world, you know, among ESG proponents and so forth. So some of the data which comes from the proxy proxy monitor is ESG, proposals have decreased dramatically compared to last year 34%. Fewer were just even submitted. To companies us companies this year compared to last year and the no action requests. Again, that's where you go to the SEC, to ask permission to not have shows concert have tripled compared to 2024. Now, it's a little early, you know, SEC special these days is probably kind of strapped and so they kind of act on these at the last minute. But but the expectation is, is that far more or far fewer proposals will be on company AGM. Agendas as a result of both many fewer being submitted in a lot more being excluded. So, you know, one of the emblematic examples is Exxon, Mobil xlm will have for the first time in at least 25 years zero. Shareholder proposals. Yeah. On their AGM for this year. That's the troubling one. Because like, if if they're the canary in the coal mine, then what the the message here is if you sue the shareholders, you don't like the likelihood that they come back. Next year is near zero, right? And and there was no repercussions for the Exxon Mobil board and despite like many Pension funds you know, saying they were going to vote against complain. Oh, you can't do this, you can't do this. You're seeing your own shareholders, they still all won re-election, right? Like, so, there was no real repercussion, but some of the drop in ESG proposals is a little misleading in as much as the inside scoop is where actually seeing less proposals and more negotiated sort of settlements outside of a proposal. So the what companies are Are doing increasingly. Is there working with these proponents that they know the Asus of the world? The religious investors? You know the ones that they've been dealing with whatever. Yeah. Right. The Trillium, if you have 20, 30 years of Cheryl to proposals, as they know who these people are, they know, you know, like they know what the conversation is going to be like rather than getting in a public battle in which you're going to draw the ire of the SEC of trump Administration. They're now having closed doors sort of shareholding, interesting. So and go to one of these proponents and say, look, I know you submitted this right now. It's not public. If we do x y z, can we make this exactly? And those are serious discussions in the past that it always been just kind of a charade. Exactly. And now there's more negotiation happening outside of the public eye. So it's like a chill. It's a, it's an optic chill, but it may not actually be like a total loss of the ESG proposal, and frankly it forces a lot. Of the sort of Superfluous ESG, proposals to get more serious in the first place, right? Like, you're gonna, they're gonna structure these a lot more carefully. They're not going to run them through a copy and send them to 20 companies. Exactly that method. Actually, the data on that method is the anti-esg proposals which have jumped from 23% of proposals in 2024 to 40% of the ESG proposals, according to the conference board, almost one in two is ESG, proposals are actually proponents, and they're only coming from, like, a couple of proponents, and they are actually literally copy-pasting their own proposals amongst each other. And the average support for those is hovering around 2%. It's not getting better, it's not getting worse. No one cares about them. So, you may have a situation where optically the sort of conservative Movement the anti-esg anti-woke, whatever movement looks like it's exceeding. The sec's allowing more of it, but actually, the ESG movement has gotten smarter more targeted like doing actual negotiations and non-public like you can't see it, right? So it's hard to, it's gonna be this year's gonna be weird because it's gonna be hard to tell you what friends look like when we're all done, right? Like you basically have to wait until next year's reporting season to see. Did anybody win last year? Because so I think I think a couple I have a couple observations just said, which is first that these anti-esg proponents which are interesting. You know, there are interesting, I love them but those are more like lobbying firms rather than investors, there's no data, there's no chance. They're not like, you know, got a bunch of assets behind him. And this is what this is. So they're kind of they're learning kind of the hard way. What ESG? Proponents have experienced for many right years. Exactly. Okay. You know, we're gonna submit this proposal. We love, it's like a great idea. Okay, we're getting two percent, two years in a row. and, you know, this isn't this isn't good, I think the second observation is that I've seen this a little bit is that there's some some, you know cheering okay. These anti-esg proposals are getting such little support and I think part of the problem is that that's not necessarily that the big indexers don't like the anti-esg proposal. I mean, they don't, but I think it's more emblematic. That there's a lot of these big indexes that just don't like shareholder proposals that much, or they, oh, yeah. Really like, very well thought out ones, and they're not even seeing them this year because they're all getting settled. I mean, that the, the Kabuki theater of it, is the difference between a 2 percent vote for and a 12% vote for is nothing like they still lost everybody lost, right? Like so like there's a lot of conversation about their they're getting bad vote results. Frankly, the data suggests there are proponent driven votes more than there are proposal driven votes point. The John Chavez in the world who have been doing this for 30 years. Incredible. Well, irritant to some people, but they're very credible. They target exactly. They pick their shots, and they do it. Well, they get more votes in John 2. Eden puts in any proposal now, because he's been around so long and he's credible. He gets higher votes than most other proponents, right? Like, so there's a proponent drive here more than there is like incredibility here. More than there is like a proposal drive and frankly, none of the anti ESG proposal. Proponents are even remotely credible. Like the boy, you're researchers of the world. Do, you know, research without data like they they're they. And what the funny thing is for our Show Business pants, we make jokes about this all the time. You see a proposal that says like so and so represented by boy or research or, you know, like so they find a shareholder and then Boyer research does the proposal. The sowins sews, one of them was a person who doesn't exist, any what we looked like everywhere? Like, honestly, we looked at, we looked at like, housing record, Social Security, wherever you find data, like we went deep. We Alexa Nexus, like, you know, anything you could find about Humanity, social, we couldn't find the person, right? Like, so, it's like, even the people that are supposed to have the shares, and now they have to say, like how many shares that they have roughly and it's like, representing one share of Person who may or may not exist, you lose all credibility. So I actually think the sort of death of the ESG proposal is way overstated. I think there's a reality that somewhere in the middle, I think it's much more targeted and is much more backward negotiation happening than we we know about, right? And on the flip side, you're right the anti-esg people, the anti-woke whatever they're actually gonna learn. They got 10 years. To learn the hard lesson of copy. Paste doesn't work doesn't work. I really think a lot harder about that. Yeah all right we have we have a moment before we should let our listeners kind of move on to something else. Any other quick comments about what we've seen so far? Well, do this again, we'll probably do a wrap-up you and me sometime the next couple months, but go ahead. Yeah, I think the last Takeaway on this point is really Exxon. Mobile is like the, the 14s and the Exxon Mobil not getting a shareholder thing. Are the concerning things like those to me, not necessarily A Drop and proposals from ESG, or anti-esg or whatever. Right? The concerning, once the Chill on governance is like, basically limiting indexers any Voice through 13 GD. Filing changes. Which we talked about in a show before, right? And the expansion of the Of how the SEC can exclude, these exactly, like the part. And parcel with that, that basically the regulatory shift chilling, the shareholder voice. And then the shareholders self chilling after ExxonMobil sued because I don't know what they're thinking. But you know, when a bully takes your lunch money, they don't stop taking your lunch. Yeah, you guys. All gone. And they were like, oh, now I'm full. I had lunch date. They come back the next day for it, so like suing your shareholder, it just because that's just, it's a permission structure as we've learned exactly permission slip. So let like, don't that is more chilling, more more dangerously chilling in my mind. So those are the things to watch it. All right. Let's um. Let's, let's move on here. I think, I think we can. We can call it a day if you think 47 minutes of governance stock was enough. Yeah, I think so. Um it's terrific talking about all this. This is shareholder Primacy. Usually hosted by Ann Lipton and me Mike Levin. I'm an independent activist investor and advisor to investors about their activist situations today. We've been talking to Matt mascardi a free float Analytics. You can find me Mike at the activist investor.com and you can find that at freefloat one word dot LLC. Our podcast is produced and distributed. I guess Who Matt at free. Float media, thanks for listening and we'll talk again soon.