Transcript
Welcome to a free flow media crossover. Yeah, that's Mike Levin. You just heard an activist investor who lives and works in Chicago. And that's Damien Wallace. Who's really enthusiastic about my living? And working at Chicago, Damian Ross, a co-founder of free. Throw analytics. Coming to us from Portland, Maine. And that was an Lipton, a law professor. And I think we should shout everyone's names at the University of Colorado who researchers and teaches in business law. I, before, you say anymore, I edit this show every single week, and it's really a joy, to save the thing that I have to edit rather than just editing or just now. That's all right. Hey man, miss cardi. That was Matt miscarry. He's the other co-founder of analytics he's coming at us from Connecticut. Of course, followers and listeners here, know that and I bring your shareholder Primacy, which is our podcast about activist investing, Security's law and all the ways to financial legal roles intersecting Collide in real life. And this is also proxy countdown with our big crossover show for the week of July 6th 2026. With my tag team partner. Matt muscari. Yeah. So on, on today's show, we kind of we did this back in December. It's do it again. We're gonna look, we're gonna look back at everything. That's been happening since December. Is that a fair summation of what we're doing? That's right. A wrap up of a proxy season that Mike. I know you don't, you don't love the term proxy season, but we're gonna wrap up something, right? We're gonna wrap up the last set of voting that roughly ended up to now. Yes, yes, So, and that's, um, so we'll send our followers here. Both are proxy countdown and Charlotte. Primacy followers here off with some worthy provocative ideas to ponder his vacations, get underway as a. Reminder, if you have questions, you can find Anne and me Mike at shareholder, Primacy one word at at sign at free float dot LLC and of course Damian and Matt if you have questions and comments for them about proxy countdown you can find them at Damien d a m i o n at sign freefloat LLC with those questions as well. So as we hinted here we were looking at overall results. From the meetings, from the annual agms, annual General meetings, borrowed from the continent in 2026, we want to know how did companies and shareholders do relative to each other in AGM votes. Well, look kind of differently at shareholder proposals. And then also a little bit at proxy. Contests, let me, let me begin with the proxy contest stuff if I make colleagues, can I do that? Yeah, there were many fewer proxy. Contests that went to like a voting outcome. My data says there was one, is that possible only one? Well, maybe. Well, according to I looked at there was one traditional proxy contest that went to full public vote and that's, oh, there were a few that okay, well, but I mean, but there, I mean, the one, the other ones were like really small cap companies really tiny ones. I was involved in one that went to a vote, but that was way back in October where I ended up on a board as a result of a shareholder vote. He's still on the board. I am we won't. I'll race that company from my that's. No, that's a different. That's a totally different story. That's the one that we Join the board and put in the bankruptcy. Two months later. Oh, so I've been working working on a chapter 11. Matt! Oh, that we should invite him to our board and see how that goes. No, that's the worst idea you've ever had. So anyway, so there have been a lot fewer contest that go to a vote. Um, this year and normally, you know, for all the attention that proxy contest kind of get between the proxy advisor recommendations and all the competing news releases and the fighters and all the advisors and all that kind of stuff. There's, you know, you usually you could count the number approxi contests that go to a vote in the US like on two hand. And one hand, almost two hands and they're even fewer this year there were probably 12 or 13 so far this year that made me. Oh, only eight or nine again, a lot of them were tiny activists profiled at roughly the same way rate as last year, maybe a little lower out of 10. That I looked at, they were only three where the activists won anything, and the other. Other than one I was involved in where we want to majority of the board. The other two were like one seater. um, so activists You know, just based on those kind of results look like, they had a bad year, but on the other hand, there were lots of settlements. A lot of stuff was going on in the background. We'll talk about this a little bit later, too. I was gonna say that this was probably an intentional strategy, right to? Oh yeah, to avoid the the public filings. This is not an accident right there was, you know, when you settle if you're an activist when you said, you generally get all your expenses, paid you get most of what you're looking for. If you're the company, when you settle, you get you avoid a lot of adverse publicity and publicity was getting more adverse. Yeah. This year well as activists made things more personal, go ahead in fact, Matt, this kind of answers the question of the craziness at Lululemon where it got. So adversarial that little lemon ended up. Essentially saying, what's his name chip? Wilson chip Wilson, basically, they were like if you shut up for the next 18. Months, we're gonna give you everything you want. Yeah, that's so that's so that works to me. That's summary. Yeah. Well, I mean what kind of settlement is that like shut up and we'll give you anything you want. Like to Mike's point I think they just, you know, I don't know. I think there's a strategy, you'll stop criticizing management will put this, right? He was the founder. Wait, yes. Wait, can I push back on credible critic given the fact that that guy helped, destroy shareholder value. You got ousted from his own company. Incredible, if you're a voting shareholder, but I mean, voting shareholders seem to have no memory, right? Like one of the questions that I like slowly, right? So what makes it really, I mean, like, we, we don't remember that. It was literally just like nine years ago, that compared to some Schmo, like me, who's some Outsider? Who just don't a few shares. A guy like Wilson, a Founder, whatever tends to his his critiques. Sometimes carries a little more weight. Oh, yeah. With Cheryl there's compared to, you know, a portfolio manager. It takes like that, that way. But yeah. Matt, it takes actual due diligence to, to do what you're suggesting, which is to look at his failures and the controversies. And, but I think heaven forbid, we do that to Mike's Point. He was the founder and that's it. That's all we need to know. Well, you know, seven, or eight percent of the shares, right? Like he had a big shot. So, so let's look at some of some of these. So, again, there were Almost no notable proxy contest that like went to a vote. This year, you're nothing like, you know, two years ago, we love talking about trying at Disney and Norfolk Southern with Ankara. There are all these huge, big delicious, there's nothing like that this year. There was, um, you guys know who big Larry Holdings is Sardar big? Larry. Oh yeah, they started ourselves Warren Buffett of. Yeah, that's what he called Big. Larry Holdings are Berkshire. Hathaway trying to confuse you. He lost two. Cracker Barrel and Jack in the Box, these were not proxy. Contests literally, where he was able to electors because Cracker Barrel in particular, had modified their bylaws. And you want, I talked about this where they, they totally created bylaws that precluded him from running directors candidates. So instead he did with Holtz and he lost badly, But then there were some other stuff. So in in lieu of some of the vote for director kind of proxy contest. There's a increase in these a lot more interesting ones so there was like a lot of m&a activists and there were two mergers that terminated As a result of shareholder, solicitation core core. We could merge. With forgetting the name with core scientific and an activist called two. Seas was able to is this unusual, which that doesn't always happen. No. Okay. Um, and star surgical lost lost to vote to approve a merger because it's some friends that might have broadbridge at. A. An activist I know called Broadway in New York. So there were two mergers that had it couldn't go forward because of activism and then there, but interestingly some other nine Board election stuff like with Holt campaigns, didn't seem to work really well. Big Larry lost both their with holds there was a prominent with whole campaign at Victoria's Secret. That one started as a proxy contest the activists which was not very well known actress called brrc. They started a proxy contest. Withdrew the candidates tried to vote. No, and then lost that one. Um so so what I started go ahead sorry. I was gonna say. So what are we? What are we thinking? Here is this, the is this the sort of immediate effects of several years of an anti-esg Vibe, which is suggesting, which is just neutering Elias and glass Lewis. Well, neutering of everyone, how about which is the companies and management know best and everyone else is just shut up. I have a slightly different view about why we're not saying the normal kind of vote for director proxy content. Why first Universal proxy LED people to settle a lot more second companies have through other means, like, through aggressive, use Advanced by us prevented, or at least dissuaded activists from trying to, Run these traditional practices, they're doing other stuff. They're trying to impose mergers they're doing vote nose. They're trying to maybe do by law amendments, things like that. So there's stuff outside the traditional or what we saw was the traditional proxy contest director election stuff. So anyway, so in that context, there were a lot of settlements. As I started talking, we started talking about chip Wilson settling at Lululemon. I don't know if you folks saw, you know what the traditional? Very good activist named impact of capital Lauren Taylor, Wolfe. She got she did a really unbelievable job to get like three or four directors at a company called wax. Wax is the ticker wax is right here in my hometown. Yeah, exactly. Wait you said she, I don't Lauren Taylor Wolfe. Yeah, I don't think we've ever covered. This is the first crop first. Everyone forgets that Starburst value. Jeff Smith did a starter project at TripAdvisor, which was a, you know, a long time activist Target and was able to get a good settlement out of them. Starburst, also got a good settlement at Carmax got a couple directors elected, and then last we forget it was the two gun makers going after each other. Oh God, that was Sturm Rooker. Great. How Anne what was that? No, it was great. Because I forget, which one had. Like a camo colored proxy card. Of course. Do you think one there, this is not a pitch to Instinct thing for class two monstrous Yes, right. So, as Beretta right, it's brighter, is gonna have some Ruger and I think Sturm Ruger is the, the company had the camera called the price here. So there are all these really interesting. So a lot of the big ones that we normally would have sort of celebrated, as going to a vote and sort of looked at those carefully, just they all settled. Anyway, there's there's others to go. This is one of the points I wanted to make is that proxy season is not quite a seasoning where there's like five or six proxy contest still to be prosecuted, but between now and September, so a third or a half as many as we've already seen have yet to Have shareholder meetings. Then we'll start over again with, you know, some annual meetings last later in the later in the calendar year. So one of the biggies that we started to follow but there was some news about that over the weekend was. If you guys followed this company called Fermi, firm is the ticker and I'm aware that right in Texas, right? So it'd be an interesting to be a Texas. A domiciled, they're like an AI power campus. All right. That's why I know them. Yeah. Right. And so, Toby nooga bar, this was fascinated, was the founder. He's was buddies with the former Governor. There Rick Perry. And they started this company to do a Power campus for AI Data Center. I got some really great land outside. I think Laredo, I can't remember where he called. A special meeting, a company, went public in a SPAC like a year and a half ago. He then called a special meeting. While he was CEO is like an April. To elect new directors because he sensed that the current board was starting to oppose him and then they fired him and then they canceled the special meeting and then he because he owns 40% of this year. She started soliciting to run a special meeting for the end of June or sometime in July. That be would have been this month. So we started to listening for that, spending a ton of money on solicitors and so forth and then just over the weekend, he called off He suspended his demand for a special meeting like new directors that would be friendly to him. And it's either because they've looked like they're making progress, and they're going to find the right tenant for this AI data center campus, or the other view of this is maybe he was starting to lose and he wasn't wasn't going to get this special meeting was like this. That was one of the ones we were kind of tracking this sounds a bit like chip Wilson. He was accused in a filing of threatening abusive and bullying Behavior. Yeah, yeah. honestly, actually, when Looking at the activist campaigns this year, it feels like more of them were driven by X Founders. Fired Founders or Founders themselves than in past year and even big. Larry, he's been attacking Cracker Barrel for 20 years. This is 17 white whale man. He has been able to get that for right. It's like not. It's that's not even knew what I actually feel like. This would be the year that activism is most important. Given the fact that the SEC has neutered, everything other shareholders can do to hold the company accountable between no action and exempts solicitation and not to say that Cheryl the proposals were that impactful anyway, but at least it was a conversation piece and there was some sort of media component to it. But now there's none of that really at all as that as effective and the activist disappeared simultaneously. Well, Where did everybody's appear? They didn't disappear Goshi and everyone out of town and did rear guard actions. To get what we needed in terms of changing companies to try to improve their their business prospects. It's a loss for disclosure, but I don't know if it's a loss for the activists. I think I think we need to push Mike to like do some massive try and like attack on you know like yeah just cost a lot of money and take a lot of time. I'd rather But we got to think about it, we'll just give you the data. That's we'll just give, you know, that's half of money. That's half the money to go. All right. This is kind of what was happening with. Hive Mark, high visibility proxy stuff. I thought we maybe we should take a minute or a little bit of time and talk about what was happening. Right. Regular legally regulatory because there was some, I don't know how loud or quiet things were first half of the year, but there were some things happening like at the SEC, or at the states. Yeah. So what What did that? Look, I was going to say what did that look like somebody? But I know there's somebody okay. Oh, dare you. Yeah, the big story at the SEC level. It actually began last year when the SEC announced it would no longer adjudicate whether shareholder proposals comply with the federal rules. So it used to be like if shareholder submitted a proposal and the company wanted to exclude, it saying it didn't comply with the rules. They'd tell the SEC and the SEC would kind of give a thumbs up, or thumbs down and if the SEC said it was okay, it would be included if they said it wasn't, okay? It would be excluded in that usually was pretty much where things landed, but last year, the SEC announced it's not going to decide these things anymore. So companies kind of have to decide. Are they going to exclude the proposal or not? And they'll and if the company thinks it doesn't comply with the rules, they'll leave it off. And and at that point the shareholders only option is to just bring a lawsuit and they have to actually sue and say actually the company is wrong and we're entitled but you have to have resources to do that and a lot of shareholders don't have the resources. To do that. So, the big change this proxy season is companies, were basically given a free hand by the SEC, to exclude shareholder proposals, and there's a study out now by a researcher at Harvard Anna, toniolo from pronouncing, her name correctly and she found that at least some companies were really kind of taking advantage of this and excluding proposals that they really shouldn't have kind of betting that the shareholder wasn't going to sue which was very likely. So the SEC now is been sued, over the change in policy. The Interfaith Center on corporate responsibility and as you sow have both sue the SEC saying that they can't just willingly stopped enforcing the rules on Cheryl to proposals anymore but nothing's happened on that. Yeah, I mean that's lost it's just getting started but beyond that this year, What we haven't seen, we haven't seen new regulations, but we've seen proposed rules and if these go through, they're going to be a really big deal. So the first one, the SEC is proposing to make quarterly reporting options. So the companies can choose whether they'll report quarterly or semi-annually, and we're recording this on July 6th. Today is actually the deadline for public comments. Oh, it is, it is unless we got to get on that, guys, did you come here? Actually, I just wrote know. Yeah, I'm a different on this one. Are you really why? I don't know? I, you know, I like all disclosure of course. But I always, when I started in this field, I thought that the Extreme attention on the short-term was a negative thing. And to And to force companies to focus on short-termism. Was bad for the for shareholders, bad for the stakeholders and I don't know. I wonder, I, I'm not saying that the effects of this is somehow going to, suddenly benefit, long-term shareholders and stakeholders. But I do think one of the reasons why CEOs, for example, have gotten so rich is they've been able to kind of game, the short termism of their environment and and kind of mess with the, you know, like this this mess with share prices and I don't know I I that's why I don't really know where I land on this one. But but yeah. Well, that's definitely the sec's position like that, that part of the reason they think that this is an improvement is because it will make things less short term and the argument. You know that you're seeing most, I'll say most of the public comments, the vast majority are coming in again against and sure, they understand that and they and one of the arguments is that it's not the quarterly reporting that inspires short term is its projections that inspires okay and and that's what you can. Change. So, but the thing about comments legally is, it's not a vote. Like, it doesn't matter. That the overwhelming majority of comments are against the SEC is required to take into account like new facts, and arguments and so forth and take those seriously, but it doesn't, it's not required to take a tally. So the mere fact that all of these, most of the comments are against that part isn't really, what matters. What matters is whether they give new information that the SEC extreme account. So that's unless they extend the deadline, which by the way, two people on opposite sides of the groups on opposite side of the island, asking for guideline extensions because there's a lot more that's all. So in the pipeline because what's flown more under the radar. And this one, the deadline for comments is later this month, there's a massive proposal to completely overhaul. What companies have to report. So, under the current SEC system, bigger companies are subject to more disclosure requirements and smaller companies, disclose less, and bigger is based on the size of your public float and the SEC wants to Overhaul, the thresholds so that more companies are considered smaller and have fewer reporting obligations. Yeah? Right, yeah. So right now, if you have a float of over 700 million that is the threshold for big and that anyone with a float of overhead 100 million. They're subject to the full set of reporting requirements. The SEC wants to raise that to two billion. And statistically, that would mean that right now, one third of reporting companies are over the threshold. If we move it up to 2 billion then fewer than 20% would be in that largest category. This was our original set of kind of wild predictions. I don't know if it was last year or two years ago that we're basically we're entering a drawdown of disclosure right where like we're gonna we're gonna taper away into nothingness and that's what scares me. Most actually about getting rid of the quarterly. Reporting is that it's a slippery slope at this point. So it sets a precedent which makes me uncomfortable. But I think that I think this is unfortunately is the future of this area just chip away at it. Yeah, exactly. When you take this into account, I mean like some of the comments. I mean like the issue here is that not just the changes and I'll talk a little bit more just briefly about what those are but also the fact that they're massive changes and they're all being piled up at the exact same time. One. I don't think this now. Three member SEC, commissions both. 5 is seriously like seriously considering all the evidence and the fact is that these are going to have interaction effects and because it's like change everything and change everything. Now that is the part that scares me the most. So this is what's going to happen if this goes through. All these companies that are no longer considered large, they know longer have shareholder votes on say on pay, they no longer have to have auditor at a stations about internal controls. They only have to report on Executive comp for the top three officers rather than the top five. There are exempt from a lot of the compensation disclosures and they could get rid of risk factors disclosures. Wow. Okay. So I don't really read those anyway. I probably should, they can subtly change. So one of the comment letters is about how, you know, often they vary subtly change. The kind of thing that I assume like hedge funds are using computers to read. They vary subtly changed and that's really Telegraph something that's going to come down the pike. So the justification for all of this. Obviously, from the sec's perspective is, oh no, we have all these reporting bird reporting burdens and they're so costly, and companies won't go. Public if we don't have these requirements but there are comments, of course that are arguing, the sec's ignoring all the benefits. So this one is my favorite. The SEC had proposed these changes and it cites this academic study about how much companies have to pay for the auditor at a station on about effectiveness of internal controls and the SEC goes to look this academic study found. These costs. It costs companies so much money to get the auditor at a station, so we should have fewer companies do it. Well the authors of that study, the academics, who wrote it, submitted a comment and said that their work was being mischaracterized because yes, they did identify these costs but they also concluded that the benefits were two or three times larger than the costs and the SEC just left that out. And the point. Yeah, they didn't read the whole paper, they just, they only read the parts. They wanted to read. And the and the point the academics made was that it's really the smaller companies that need the attestation because they're the ones who don't have his professionalized system. It doesn't matter as much for the big companies, so you're In the opposite of what you should be doing when you say the smaller companies don't have to do it but not only that but what this this burden this terminology that they always use, it's a burden, how that's never a proven thing, right? It's just they're just playing around, he's just estimating, there's costs and so right? But they just when they estimate their cause they don't do it relative to something, right? Like they just say like they like they would say shareholder proposals cost like our overly burdensome to pay for but relative to CEO pay. You're talking about a relative to everything. Yeah. What are we talking about? Like the costs aren't actually real. It's all just cloud cover right? So so really the question is the SEC is very clearly tipping the scale towards corporate power and away from investor power, right? And the states are are actually they're doing the exact same thing. It's that the race to the bottom. for like, you know, what can we deregulate for investor rights and not corporates but Where does it at what point does it end at what point does the market become? It's already according to our own data, it's already more than a 20% totalitarian companies. Those are companies with, like dual class shares our classified boards. Plus, you know, like some sort of control structure, a Founder on the board with a large stake. These are companies where there's no challenge, no real, accountability from investors to begin with at what point you know, when we hit like 50%, is it just a private market? Like at what point have, we gone past the pale. I know. And I keep saying like, I mean others are less concerned about it but I I think for me, part of the concern is there's so much indexing and Shadow indexing and things like that that like all the mechanisms all the market mechanisms are are seem to be, you know, atrophying like that. That there's just, you can't vote. And there's there's less information to basis sale on. You can't sell easily. If you're indexed, you can't sue. Because the states are eroding those rights. Yeah, of course. So can I play? Where is ass here for a second? Oh yeah. Now the the opposite end of that we talk about this all the time and I Know It specially frustrates you. So according to the data that I've scraped together we only have nine say-on-pay packages that have failed out right so far. and there's basically very, very little action against pay at all. So I actually have posed a question that was going to ask later in the show. Why should anyone care anymore? Why should we care about saying anymore? If the markets already basically eradicated it and I'm not saying that I support getting rid of it, but I feel like the markets are already. The investors class is already ignoring it so well that same argument applied to proxy access and the ability to nominate your own shareholder which is really only been used by a few activists investors but was fought for by Pension funds and you know as a manager's over years years and years and years getting proxy access. I remembered doing a report at msci, back in the day, with Rick Marshall and talking about proxy access as a as sort of a beta activism, like the market is all pushing for the same. You know, governance request at many, many companies across the S&P 500 in order to create a situation. Where investors have that, right? And then investors got the right and summarily ignored it. And there I I'm gonna Exactly true. Because Universal proxy. Made proxy access less important. So like if you got to Universal yeah, like before approximately. So for example, I'm not sure it would have made a big difference for a lot of activists, but like the Starbucks, ESG proxy contest that might have been a proxy access thing if there wasn't a universal proxy. So sure. But even then, we don't see we have yet to see a non-activist investor. A submit a director for election. We've yet to see a failed say on pay vote where they still didn't find a way to pay the CEO. The same exact amount we've yet to even see a director. In fact, this year in 2026 and multiple directors, got voted out, only one or two actually left like that, actually, not the zombie director problem, right? The zombie director problem is as large as it's ever been. And the ones that left were the Cracker Barrel political one and Brian Hemphill, who was like the first one voted out this this season and they only get voted out for attendance. Like there's no other vote. So share price, our literal bare. Minimum expectation is go to a meeting if not then will vote against you and even if we vote against you, it doesn't really matter because you're probably not going to leave anyway because like that they literally, right. Damien pulls this in the proxy countdown. All the time. They literally right in the eighth K. We think it's in the best interest of shareholders. If this directors, sticks around after shareholders voted out that direction. Like, so I'm not sure that even having, and this is the, this is piling on the wise asness. It like I'm Pro shareholder rights and I'm not sure I understand exactly why we have them because the investors themselves haven't been using them. Okay? I get it. Yeah, you're getting to my favorite subject which and I have talked about endlessly which is everything. And everything is rational, apathy, I don't know that it's right. Like, so, rational, apathy is the argument that the cost of doing it effectively outweighs the benefit and or your own portfolio to your own portfolio, right? Like so your own individual benefit from doing this, action is outweighed by not doing it and just sort of letting the market decide. But we have example, after example, after example, in not Capital markets but in every other market like if you look at sports as a market, these if you if like teams had rational apathy then, what would happen would be the players would choose their friends. They would the teams wouldn't necessarily win, they'd all get, paid more and only the players win. That seems to be what's happening in the real markets. I know I'm getting off topic but I The idea of rational apathy to me is like an excuse for not doing something, when all the academic research suggests that doing something actually has value, it just nobody wants to do it themselves. That's still that's that's the heart of the, that's the heart of these but still no one's answer my questions. What if in our democratically held elections, you know, for political offices? What if in every election in the average election won Canada, got 95% support and the other kind of 5% support. Would we care anymore? I mean, when anyone that's what's happening with directors, they get 95% of support so I just I understand theoretically why it matters and I I fight for that but I don't I guess I'm just sort of maybe hope you because because What, what is the meaning of this vote? Any what are, what are the meanings of these votes? I think I think. Okay, you know, out of three to four thousand votes a year, You know, there's going to be that small handful. It's just it's shrink in the past few years, but there's going to be a small number. Where there's a lot at stake for the shareholders and so forth. And so they all the factors kind of converge to make those votes relevant and valuable, That's that's kind of the my immediate reaction to, you know, why people continue to even vote because occasionally there's an optionality you'll you'll you'll need the right and the opportunity to vote at some later point. So you want to kind of preserve it. Maybe that's maybe. And let me ask you a question. How much of all the changes change the way you teach have, you had to, like, tell the students, like, by the way, you're learning a whole lot of stuff that a is like, to change in B. I have the people don't care about it anyway. Yeah, I have a sec. Alright, class where I teach the secret changes and those dramatic changes. It's it's a nightmare. So when a case book and we have to rewrite the case book every year. So those actually change quite that changes, the lesson plan, quite a bit. And I actually tell the students on day one, the Securities laws are always changing your responsible for whatever the law happens to be on the last day of class. So I have definitely had situations where I handed out new rules and new statutes mid-semester like what changed? Let's go back over it. But it in when I take teach state law, like State corporate law, The story was mostly Delaware, and I pretty much was just teaching Delaware. Now, this year, for the, for the first time I actually gave them Texas and model business Corporation act and we really went through to so that students could compare Delaware, Texas model business Corporation act and they could get a sense of how those differ not Nevada in the curriculum yet, no, because, well, Texas and Nevada are similar in many ways. I'm so that's why I chose Texas. Hey, there was one of other thing that happened. That's and then we have a lot to talk about related to Gerald, proposals, and so forth. There's some really interesting stuff going on there, but there was one other item I wanted to bring up before a break. And I'm almost reluctant to do it because and I hate talking about it which is, can you guess, Elon musk's space, he had to be musk. So there was of course with lots of Juicy and potentially repellent and IPO, you know the IPO Market looks like it's thawed, has it not and SpaceX went public and that was about Four weeks ago, five weeks ago, three weeks ago now. So, I was gonna say that. I know I didn't I didn't put it, I didn't put it in order for shares. The only way I'm going to become an owner is SpaceX is when they convert my Tesla share when they acquired. Which that was, that was a landmark. IPO would? We I mean for bad and good reasons but probably more. What are the good reasons? Yeah. Okay. More back. Know, do you know? I'm willing. No. There's no. There's no. There's no reason. There's nothing good about this. I think on our show I call it. Yeah, go ahead. I was gonna say, I think I called it the beginning of the end because it because really well, because really this is like an the The the general population, the market investors we have, we have finally accepted the the most closed. Public company in the history of the, like there is there is no hope to have any access for having me. Say earlier, iterations of this. Well, but this one is really like a lot of jumping up and down with when Facebook went public and I, and yes, control structure. And of course, we talk about that all the time, too, but but, but this is really like, but we as a culture in a society, you know, we used to kind of learn our lessons from from worst practices and best practices. And we've had 20 years of complaining about Mark Zuckerberg and the ill effects of Facebook, we've looked at the corporate structure and and, you know, we rip our hair out about it. So here we now have this other behemoths coming from this other you know, ego maniac. And yet we do, we do nothing to change anything. Like there's no there's no Sunset Clauses. There's nothing. It's just a completely because it's it's up in my and I we again we've talked about it but I would welcome your comment on this. Is that in some respects? The SpaceX IPO was giving shareholders kind of what they want, which is some sort of hot IPO or they can compete over it, you know. There's there's Association, you know, Facebook already. Yeah right. Well, it is. So, so that that's, you know, that that also happened with some, you know, the ownership structure is is right? And To be fair like, you know, some of the limits on Securities Federal Securities actions, those have yet to be tested and it'll be sometime before they are because I mean let's assume he does not commit Securities fraud on day one. So it's gonna take some time and that's kind of like what? I don't know. It's criticized the legal analysis in their, in their, in their registration statement, but you know, it's going to be some time before there is some kind of reason to bring us a Securities, fraud action. And at that point, if another company doesn't do it. First, you know, all of these restrictions on Securities class actions. Those are going to be tested and we don't quite know yet how those will play out. So we don't know if it's a locked up quite as tightly as they've tried to do the worst thing to me too, was the what was the only standard in poor. The only S&P didn't bow down and change older. Yes, right. Yeah. That was the most disheartening part of this too. Was that we? Had established, you know, criteria forget, you know, forget the crutch. Forget it, all just, let's just fast track this in. I mean, one of the things is how much that broke through in terms of public reporting. I mean, they get it wrong but like, But Jimmy kind of get it wrong. It look. Oh, like they just didn't quite describe how the indexing works, but like Jimmy Kimmel made a joke about it. Like, oh my God, Jimmy Kimmel made a joke about SpaceX was gonna be in everyone's 401K, whether they like to write. Um, and I'm seeing, like, headlines of like, it's entering this index. How much are you exposed? I couldn't help it. I sent an email to Vanguard. It's please. Don't put it in the index and they sent me back some kind of form letter, but, but the, but there was clearly, they were getting complaints. And so that idea that the rules changed for musk personally and the sense that it wasn't entirely based on like a meritorious, re-examination of the rules, but specifically for musk that broke through in public reporting in a way that I haven't seen before. Yeah. Oh, yeah. I still think though. Investors have abdicated their responsibility. I mean, like they, like the the lineup of Wall Street Banks to get this, To eat the fees to get this to Market, including the contingency that they buy grok as part of you know, five or 10 million dollars on a Crocs. Right? I mean that was like a thing. And like and and when you break down the business, and this like, Michael Berry did this, it was, this was everywhere, right? Like everyone broke down the business and said, all you're really buying is HughesNet from 1997, which is like satellite internet. Just done well and everything else. Fails. Right? Like everything. Else, loses money. It's Satellite Communication business. It's a break. Even or slightly better. Thanks to the grace of NASA. A space business and a dumpster fire and AI business, right? Like so much so that that they they bought a company announced their intention to buy a company before going public, but couldn't announce the purchases of the company and the minute they went public. They announced they purchase of the company and there's no vote because Elon owns all the Voting Rights and shares and everything. And I actually what I think it is is like investors are just giving up and said like whatever the Market's just a meme now. Um but I also think it's like, isn't it Peak founder pettiness? Like you have 80% of the voting power but you also wrote in the fact that you choose 50% of the boards 80% of his shares, Locked up like the level of like it's not good enough to just have 80% of the voting power. It's all so important that those his shares specifically have to vote him out a CEO or so, what I, I don't know if it's an easy way to answer this. What happened between the the failed wework IPO that everyone mocked. So something did happen so vociferously that it got drummed out of existence. He got, you know, he walked off the plank into into nowhere. How did we get from there to here? I don't that's good. Tell me aside, Elon Musk and sort of faith that he's got a sort of built-in retail fan base, that's gonna drive the price of the stock and everybody sort of has to follow that. There's actually people were asking me about that and the law changed. Okay, we work and SpaceX, which is that when we work went public, it did not have the ability to give large investors and advanced look at its registration statement. So the first time anyone saw the registration state, Was at the same time, the entire public side. But the law changed so that large that SpaceX could legally feel out. Large institutional investors and show the registration statement and show all the stuff and show the wacky structure. They were able to show that to large institutional investors before it was made public and that meant they could really make sure that they had that locked in and they knew what those orders were going to do with the new with the demand was going to be and and they had a much better idea of demand for shares. Yes. That's seems nuts. It was absolutely. I mean not only is it not because like you know if you're a smaller investor a smaller institution you didn't get access. So there's already a breakpoint at some point like you know, they're not giving it to Joe's asset management and you know, like in this is black Duluth but it's like they're showing at the Black Rock Band, right? Putting a five billion dollar share order. So already there's a there's a top class and a bottom class of investor but it in in SpaceX this case you had the retail component that was way bigger anyway in terms of demand. But I mean but that was partly, this is a lot of you know, Keenan Beauty condos situation that in a lot of Institutions buying on the strength of what they expect with the retail demand would be and they were right. Like I couldn't get over at the SpaceX page for their IPO. Had opened a brokerage account and it had a list of where you could leave. Brokerage accounts where you could open an account. So you could put, it's not how this usually works. Not all right, it's nice. Um, we should probably take a little break here and then talk about a lot of the ESG proposal stuff. Everybody is that make some sense? Let's do it. Yes, let's do it. We'll be back here momentarily at this crossover episode between shareholder, Primacy and proxy countdown. Shareholder Primacy is brought to you by free float, analytics.com. The only free database of corporate directors their influence and their performance. If you own a Stocker, retirement plan go to free float. Analytics.com and look up Witch of your elected. Directors are performing well and which aren't use your vote in the alternative democracy and get your data at free. Float analytics.com. Now, back to the show, Welcome back to the proxy countdown Cheryl, or Primacy, mid-year crossover. I'm Damien Raul's back with and Lipton and Mike Levin from shareholder Primacy, and of course, Matt McCarty. Come on. Why do I sound so sad? I don't know. All right, let's what. Okay, let's look back at the 2026 proxy season. Let's do it. Yes, please. So the one thing we didn't really talk about much in our first segment was Cheryl the proposals which, you know, Merit a thorough review. It kind of what happens so much has changed. So what and you guys have said, you guys have not you have a lot of data on this so I'd like you, okay, I'm gonna push back on that, we really don't. I mean mostly because there's just the new ones of this is just not as interesting as it used to be. So, the, the big takeaway I suppose is that proposal submission fell from 9501 last year to approximately 790 this year. So what most people predicted and I think, including all three of you. Yes, you the the mainstream Addiction was that? We would see that all companies would exclude. All proposals, where I, I came out and said that. So, yeah, I was skeptical about that, but maybe for the wrong reasons. So the the number is, is that about 70% of submissions, went to a full vote. Yeah. And oh no, I just go continue, but I have. Yeah. So, but the reasons why they're saying that 70% of submissions went to full vote is that they were worried about litigation or some kind of an investor back. And there were some suits that were started over some of this, but they went to full vote, but they didn't all go to a full vote at the same time. So like, as in a more companies were really careful about, not excluding them earlier and then later they started excluding more. It was like they were getting used to the new system and Anna Tony ELO's paper. She finds its really there was like company specific differences. Like there are some companies that were kind of like being very Fall and being like, I'll just let them all through. But there were others that were being very aggressive about everything's ordinary business and we're not going to let that go to it. Yeah, we saw that a lot with the big tech companies, you know, they they would like Facebook still met. I still had like 13. Proposals write alphabet the same. So, the companies where they had dual class shares and didn't matter. So, it doesn't matter exactly. It doesn't matter, but Elon musket now is dual class at SpaceX, and he still is putting like a threshold for people to be able to. But actually right to the point of that paper, right? Like the early data that we did early this year, we haven't updated their was actually correlation with the law firms that were submitting, really? Yeah, there's there like certain law firms were much more aggressive about submissions than others, and that's a cross company. Same firm across companies. So we would see the same names pop up, now, like a miracle study, like we didn't do, you know, not all 900 but we did look at, you know, early on the season when we saw who was getting excluded and why we saw John Chavez and was over targeted for exclusion and no actions and certain law firms actually like overlapped with their willingness to submit requests for no action or like, whatever the processes. Yeah. So so yeah go ahead. Mike not we had about roughly close close to 1,000 last year almost 800 this year only 70% went to a vote which is about I think that's close to what we'd seen before. Yeah. And higher than most people predicted. Yeah. Oh, yeah. And that's the main point. Okay. So um and then what happened from their overall support dropped. So only about seven to eight percent of proposals actually achieve majority support. We've been reporting on this every week on proxy count on like, right, nothing's winning, but the big takeaway I thought was that it was really dominated by to me really two groups mostly like the old-fashioned corporate governance. Submitters the John yeah, 50% of all submissions were basically from the same two people. What you really saw was a complete drop off of e&s issues environmental and social, as he, you know, places like as you so, basically disappeared. I mean, I see are all those folks, right? And the other group that dominated was what I call the hate proposals or the anti ESG proposals. So, this is from the The, the groups like Boyer research, the national Legal, Assistant legal, right? Yeah. Now, they were tricky, so they put up a big slew of hateful, proposals, usually, they're mad about trans people or something, but and, and those routinely got way less than 1% support, which is surprises. Nobody, but what they also did, and I know, Matt, you hated this and I actually hate it, too. Because I know they're Jerry rigging. The system they magically became old-fashioned, ESG analyst and start playing that to me. I don't know. Well, I think it's I I and you explained. I think we know, I might actually have to take some credit for it. So I talked to somebody personally like somebody from one of those groups, one of those like executive directors are one of those groups reached out to me and we we talked, we had like an hour long conversation and one of the things that I said because we were we did some arguing about like, you know, the nature of these proposals and like, you know, like it was so almost combative, but some was like, actually him asking me questions about, you know, the, the process and the thinking around Cheryl the proposals that I said, what one of the things I said to him was You know, the the thing that you know, the as you shows of the world mastered was an ask that gave investors, something that wasn't an ask, it wasn't overtly political, it wasn't, it wasn't like ad hoc ask you like asking Disney to talk about the number of guests that were trans is something that you're only gonna ask Disney about. I said, investors want better disclosure in general so if you make an ass that's like give me your scope one and two carbon you can make that ask everywhere and the more you get it, the more investors like that day. You use that data are even choose to ignore that data, but it's available to them. So your asks should actually be something that an investor can use. And what we saw happen was they flipped from and I think it happened for two reasons, one to make a coherent asked everywhere, they focus more on governance issues, particularly independent. Chairs. They they really like the idea of an independent chair and two, I think they all realized that that coherent ask gets more support on average and allows them to go to their donors because they are all. Absolutely. And they get, they tell their donors are average. Vote for has increased year over year because some of these Like you know some of the I could not figure out why like and see National center of a public policy. Research is asking like scope one and two and climate disclosures like that just seemed very antithetical to their mission. It is absolutely. Is it? And it's meant to drive? What we, what we do know is the shareholder proposals that were submitted by John Chavez and Jim mcritchie, get an average level of support. That's way higher, no matter what, because we know investors vote proponents more than proposals the investors trust. A proponent is been doing this for a really long time. They know the asks, they generally know who they are. Their their pseudo networks of these, you know, individuals who, you know, like show up at conferences. They roughly know each other. They trust each other whatever. But the they don't trust these anti-esg proponents at all. They're kind of outside the Zeitgeist the exact same proposal, submitted by John Chavez and will get higher support, the national Center for Public Policy research. Even if it's copy-pasted for like, independent chair or something like that, we know that the Chevette will get more support, but they all know that the ask itself will get more support than saying company, ABC, hates trans people vote for, you know, hating trans people that'll get less than 1%. So they can use these votes. The jury rig effectively, the vote for donor purposes and we can look at the donor filings and see it. Oh wow. Yeah because I was thinking maybe they just were trying to build up a cred so that then for other kinds of know they're trying to manage, its they're trying to manage You know, they have multiple constituencies and one of their constituencies just donors, you know. That's not, that's not a whole lot different, you know. I do know that that's how it works for some of the main the e&s. Yes, she. Yes. Absolutely proponents. Is that they have a donor base. Yeah. And they want to see Improvement, right? Yeah. They always want to see progress. So, and in that progress can be either in the type of ask, you know, we're asking for more and more. Now, we're asking for scope three, we go one and two or it could be in level supporting the level support. Yeah. All right. So I just really quickly on the drop off like and just to the drop off, right? I as you so I see the, you know, those kinds of groups, you know, this gets back to I think what was said earlier about I think, you know, there's been so much regulatory hostility from the Trump Administration towards ESG stuff. I think those proponents think Cheryl just aren't going to vote for it, not be not even Whether they want it or not isn't really the issue. The issue is that they know that like, you know, Ken Paxton will file a civil investigative demand if they if they voted favor of an environmental proposal. So they're not going to vote in favor of a fire metal proposal. So as you so doesn't make the proposal I think that's what's going on. Well I forget that Exxon suing it shoulders. Yeah well yeah but that was about on a very specific claim and the claim was you are violating. The rule that says you can't resubmit the same proposal. That's not always going to be the issue. Especially now that you could just, you know, a lot of these when you read the proposals, you're over a year. They a lot of them read like resubmissions. Well they are, you can't. You're a certain voting threshold, right? Well, Exxon, speaking of Exxon Exxon was was overtly snarky this year, they added into the in the proxy statement they added like a sides to the titles of these proposals saying like this one that has failed, you know, 20 times in a row and really sucks like that's, that's really good. It's like vote for proposal 5, here's proposal 5 shareholder. Proponent asks for climate proposal that has failed over and over and over again and nobody should vote for like as the title but make your own decision. So moving on. Okay. So the large majority again, we're sort of these old fat. 50% were these old-fashioned corporate governments? Yeah, the only thing I would say that is new, you know, whether it's interesting or not, I don't know our sort of these AI ethical governance questions. And, you know, we have a interesting moment here for, for shareholder proponents, which is that the general population on the left and right seemed to both hate AI. They hate data center, I don't know. You know, this is an area that might become that might stick more in the future. I don't know. I don't know what to say about this just to be clear. We're talking about how AI is used like in active as a government. This is Activists are proposals about a company's relationship to and use of AI. Well, it could be anything, it could be, it could be a data centers. It could be algorithmic, transparency. It could be data privacy. But you know, this might be one of the only ones that the population agrees with. I don't, I don't. Yeah. So, it's interesting because the Trump Administration is obviously doesn't want to regulate at all, but the states both, you know, red and blue. There's just general Groundswell of concerns. Yes. Well, it's funny, you say that they don't want to regulate it but they want to take an ownership interest in it. So hey, we can move on quickly out because I know we've been already going long on the show pay and I already hinted at this earlier, I would say nothing is happening in pay. So it's satis quote, I mean, right? Yeah. So even worse, this study. I looked at said that major payrolls, Which is less than 70 percent. Support shrink to 44. Out of 1100 companies. So that's why I opposed the question earlier, not that. I am suggesting getting rid of these votes, but, but what does it matter? I don't know. Yeah. I mean, I again, and my my problem with Sam pay is it's, it's, it's precatory. It's a completely advisory. Yes, vote. It's it's it's a way of kind of diagnosing. Shareholder sentiment. But it doesn't really have any, you know, the only practical input impact has to do with CEO ego, where if they're, you know, votes aren't quite like some others, they start to run around and talked to a bunch of shareholders and seeing what can we do a little better but there's no real concrete impact. No, in fact, we votes have we spent a long time? I don't know if you remember the name of the company Matt I don't we spent a lot of time on our last show talking about this one particular company to get got like, 45% against last year and I spent hours looking at how they tweaked the plan, and then the end result was that, this CEO got a raise, got even more equity and, and they changed the language and some of the plan. But if you did the math, it didn't. It just came out of it. Yeah, it didn't hurt him at all. No, it did. It cost him one million dollars in and total summary comp. From 35 million to 34 Equity but he got like nine X the equity. So really painful. I have a question. I mean obviously leaving aside those kinds of games just in terms of where shareholder voting is on this. I mean, is this just like a bull market situation like I mean in general Cheryl just vote against pay when they Like stock prices, and they vote for pay when they do like stock prices. And my question is, is like in the next market crash, will we see more rejections of PayPal packages? Well, that could be. I mean, the only time I've ever noticed anything that matters in this world is that smaller cap companies. So and it's a direct correlation to a failure price and when that share price is low, they vote against everything. So I don't know, I don't know why it matters. Maybe Mike would know more, I don't know why they pay attention more at a small cap company but Really. I there's so many different factors in the small caps, you know. I was like I was gonna say that the institutional Holdings vary but that's not always. True. Not always true, right? Yeah, right. So, um, You know, I part of it, they don't get quite the coverage, you know, they don't have the equity analysts following and so forth. So there's there's a lot of potential. Things that could be going on there. And I I confessed to not having a really clear idea about why I mean, one thing is, is eerily consistent that no one votes against the people who set the pay that never ever happen. Yeah, I mean, director votes but you said that at the top of the show. Yeah. So as long as we're consistent, we hate the pay. We love the people who said it though, and we and we track this weekly there is that there is absolutely zero correlation between the people who create the policy. And the say on paper we we can't quite have. We figured that one out. Matt. I don't I don't understand that one. I think people can't find the against button for directors. They will penalize the chairs of say nomination committees, if there aren't women on the boards. In fact, you know, we covered one at the the conference, the I already forgot the name of the conference is. Yeah, if you're listening. Where they, in fact, even voted against the only woman on the board because she was the chair of the nomination committee that didn't have enough women on the board. So they're, they're really locked into that idea. But the only other thing I wanted to cover here, I had, does anyone else have anything to say about the high director support before I move on? Just appointing? That's all. The other thing I was looking at this year, which I, which I think is, you know, potentially interesting is what's going on with proxy advisors so, institutional investors are starting to publicly break away from your issues and your glass Lewis's. Relying on their own kind of internal systems and what when I think what that really means is that they're letting AI, create voting systems for them. But I think this is sort of an important moment There's something else called this ISS penalty which is shrinking. So the ISS penalty is basically this in 2021 ISS against recommendations on say, on pay on pay votes drag down companies, support by an average of 30% inch points. This year that penalty strength to 20 percentage points. So my overall statement here is that the effects of your issues and glass Lewis's are maybe starting to go away. In fact, let's not forget Exxon Creating its own, you know, retail auto vote system where, right? So there is some kind of shifts. Interesting shifts going on here, man. I know you want to say something. Well, I feel like in like investors realized that how easy it was? I mean the important number is actually the percentage of time that ISS and glass Lewis say vote with management, right? And I think investors in general realized it's way cheaper to just voting with management. 98% of the time is not that hard. Why we paying two people to tell us to do that, right? I I mean, I could talk about like, what their using instead, but for a lot of investors, this is part of, you know, I mean, they need that at least to show compliance with food. Yeah. Applications and so forth. It's not. So I, I think, you know, they're, they're gonna want to use some kind of advice or unless, you know, we build their own kinds of tools. Right? That's what Jeep is what they're doing. They're doing is they're, yeah, they're building those AI tools so that they can say, you know, effectively, we have our own tool in-house that uses data and comes up with a recommendation. They are likely to keep paying one of ISS or glass Lewis and it's a race to the bottom to keep those accounts, right? So ISS and glass Lewis are forced to both say no less and cost less because they're expensive. Well, they're doing different things. So like last Lewis is going to move to a completely non recommendation model which you know looks like to some extent you know a way of getting up from under some of the regulatory pressure they're under. So their plan is to just you know help them develop their custom policies that they're not really making recommendations. It's just the investors just applying dad and doing it. But the really interesting thing though is you guys keep pointing out like these inconsistent things, like I vote for the Committee that recommended the pay. Even though I vote against the pay, I wonder if like a world with custom policies is one that actually gets at that more. If those are sort of built-in, you know, investors build that into their platforms into their set of choices that and because then they can, you know, mix it in with, you know, share price performance or other types of governments factors and so forth. Because, you know, part of the problem is that, you know, you know, the shareholder vote is a sort of a singular action, that, you know, combines a whole lot of sentiments about what is going on at a company. And so, but the funny part is, hey, but vote for the comp committee because maybe there's other Other things that that comp committee director had in their favor. Something I saw an early study that where they designed an AI model to take in more information and give vote recommendations and what they found in the early AI models was they said the recommendations were to vote against more directors and management. All right. Yeah. Then had then then investors were doing which would mean and we're not seeing that in the data. We're seeing this like same more support for management which would suggest that like, saying you have an AI model is a simple as voting with Management in every situation that is in an activist situation, and you do some due diligence. So it'll be interesting to see over the next, like two years whether or not, these are quote, AI models are actually used and how they're used, or how they're tweaked to basically just have the same out, or items, or who sings Who first because the AI model, well, there's that too crazy. You okay? So I'm gonna hand off to you Matt but I do have some data based on what you just said. So the interest and this is all just to say that we're the the fight against ISS and glass Lewis is working like the, you know, the the fight in our, you know, the political theater of railing against ESG, seems to be working. So, in fact, this year ISS backed 48% of all proposals in 2026, which is way up from last year, when they supported 34%, but it had no impact So people are just they're not listening like they used to listen, so that I have more that I'm not gonna get to because we need to, we need to move. So, Matt want to finish this up. I want to do a speed round to end this a speed round of a couple of questions. I think there's about six questions here, where it's just. Yes, no. Did it matter? And we've answered some of it but we'll do a speed round and then a couple of questions that we don't have to answer now, but will throw out to the universe. We're going to do what crossover in January? Yeah, we got another crossover for happy hour coming up. Anyway. All right, so let's start with some of the did it matters? Ready. No action. Basically set to ignore by the SEC. Did it matter in 2026? I say, yes, I I think it did it at some companies that and it will matter more going forward, but I think it will matter more Damian but yeah, I agree with and I I think what it means is is more for the entire I'm pulling back and looking at the entire landscape of it is absolutely consequential. What what it means going forward, but did it matter like you're on year? I'm not too sure maybe it matters but but the overall effect of it is is massive. So it hasn't mattered quite yet, but it will matter. Well, you know, we're in a very like, we're in a friend, you know, and talked about it at the beginning, just the sheer amount of proposed changes piled on top of each other, this just chaotic, you know, effect of deregulating and and tearing it all down. That's what really matters. All right, so in that vein dexit, which the early conversation around decks it was Delaware's just fine, right? Like there's not a big giant move and this was back in, you know, like, you know, last April we're talking about the talking point, but does it really matter? Now, this season done or this, this voting, a GM period, done did dexit matter. I I think it I mean for me that what I'm looking at is like, yeah, it's statistically I don't know that there's that much movement out of Delaware but it's not that it's how Delaware responded. It's the Delaware responded by dramatically changing its law. I think it's judges are probably going to be more, you know, treat challenges to board action, more gingerly, and it matters in that sense. Absolutely. All right. That's it. Sounds like everyone agrees. Then how about the anti-esg movement? The lawsuits against the states, the rise like, Because everybody like because Oh no you're not the anti issue proposals the opposing the right place again. Oh yeah, I'm sorry. Yes, absolutely absolutely. Yeah. I mean it's not like the lawsuits are like, you know, right right now like every their their the states are trying to like clip proxy advisors Wings because of ASG and all that's failing. But that's not the point. The point is it's getting people to like you know investors to try to back off ESG and not vote for it and and you know is has changed its policy recommendations on ESG all that. Yes. So it's not that's important because it's just what you said about dexit and is that the right has won the political theater us aspect of this because the the ESG World, whatever that is they don't fight back on any level, there's no crazy sources, okay? But maybe, maybe that's the case. But you know, there are clever ways to do things that don't cost a lot of money. But well, yes and again, that gets to my my contention that Problem with persecutory proposals, isn't the proposals, the Preparatory part is that it's a community that doesn't doesn't, you know? Push its agendas hard as it could in the most effective ways. Yeah. All right. Well, let's move on to other egregious things. Musk's pay package, which passed just in this last season, right? Everyone. And now he has, no, he moved on. He did, but SpaceX, but that package we said in our December crossover, show that that there was the potential for other mini musk packages, does it matter? I think I've done it. I mean Ryan Cohen, I can't remember. Is it Ryan? Oh yeah, yeah, 35 billion. There's a bunch of copycats that are coming out but he's taking off the table because he's desperate to buy. There's a bunch of other tell. You're right, you're right, CEOs and others that. Okay. We're going to set these, you know, audacious goals not only Okay. No, wait a second. I mean I think it was either. So, what's worse SpaceX Tesla though? What would I think? Oh go ahead. No well no it's it matters in this sense it's SpaceX buys Tesla depending on the price that's SpaceX Pays His pay package of Tesla is triggered. So he gets more shares. The more, you know, he'll yeah the Tesla paper out but it's it's not because the market loves their right, right? The busy because SpaceX pays, you know, 2.5 trillion for Tesla then he gets another 70 something million tests, right? Here's what I think is worse, is that what is done? Is it is it's the greatest the, the market people caring, right? So, so test gets his Paypal package, so many people support it and then, and now and Sam pay everyone supports pay. And now what we're seeing is companies off proxy, Off policy, they're not part of the policy. They're handing out massive retention Awards, because they know there's not No One's Gonna care. No One's Gonna fight back. And there's, of course, and you can't pay over it now. And in pay, you see this more than anywhere, the copycat effect, is it just a dominant effect is like it's like a fire and Colorado, sorry Anne but because that everyone just copies this so because no one's gonna do anything, they know that No One's Gonna push back. All right. Two two more ready. This one. I think we can agree on. And maybe in all the same direction, exempt, solicitations are dead, except for the super-rich. Does it matter did it matter every night? They never, they never mattered before you. And I'm going. To Natalie because I know you're gonna do it on the notes. It's called, is there? There power outside, the proxy evidence from exempt solicitations and it's actually been on for a while but they just updated it and it shows that institutional investors access those exempt solicitations and it affects voting outcomes. Wow I'd like that now. I'm surprised. It's a real. Yeah, touches me personally I would have said it was an easy know. I would have thought so too but there's there's Dada I am not interested so let's someone else decide if they want to. I love being proven wrong. Finally. Jay Hoag, the Netflix director? The Netflix director. He, well, no, now sharing now chair. Oh, share. He shared in the bedrooms jump in 2025 74% against vote to 93% for vote in 2026. 2025 one more meeting is what he attended, did it matter attending that one meeting. Did it matter to his vote, I guess, but it didn't matter to the board quality and how Netflix is done, Netflix is much bigger problems in their stock. That's what I love about. I love that while there's doing fine, but it's still, you know, they're trying to look for a deal, you know, remember they were the ones that were trying to buy Paramount? Yeah, I think they're in that, I'll be happy. They didn't, they're traveling. Oh, yeah, they got a break fee. But now they, they're You know, that's the I don't follow media too hard, but they're, they're everyone's urging Reed Hastings to go. Try to find a deal. So anyway, Reed Hastings, who's no longer supposedly, doesn't work? Doesn't work there, right? Yeah, well, they're definitely talking to read Hastings. Like they have co-ceos who basically just call up read when they have a problem. Those are my that's my speed, round, six questions and just a couple of thoughts into 2026 and and 2027. But until next time we meet, I think, on my mind in a non-active situation, does anything except attendance matter in a director vote? I pretty sure the answer is no, but no share price too share price. We have zero correlation between share price, and director votes in the absence of an activist when there's an activist. Yes, sure, right. There's no activist. Everyone's 96% for our activist shareholder proposals dead, right? Like there were a lot of activists Herald of proposals A trip Wilson was trying to declassify the board. Is that going to be like a dead space? Is all gonna have to be back room? Negotiated? Yeah, probably. Again, they were really as big, a deal as they could have been with with that with, you know, activists. So, but yeah. Especially under 1488. The it can have a problem with it. I would say this. Matt, the only way this change is at the general public realizes, what they are. And they fuse their hatred for things like data centers and Ai and use this mechanism to do. Something splashy use social media to to gain attention for, for issues like this and anything could change. I mean, again, you you finally have an issue that everyone can agree with. It's a, it's a massive issue and so, I don't know. I mean, it's just a people open their eyes. I mean, I, I think the answer is no, yes, or dead. All, and I'll end with this final thought for 2026 2027 and that Is AI. China. Ai. Ai ai China. China, China. I just see. Well, see everybody again. Another crossover sometime soon. We have a lot to talk about between then and now. So let's let's let our followers here. Move on to some some other stuff. How about that? This is set them free shareholder Primacy and also proxy countdown Cheryl. The Primacy is hosted by Anne Lipton and me Mike Levin. I'm an independent activist investor and advisor to investors about their activist situations and is Professor of law and the Lawrence W, demuth, demuth, chair of business life. The University of Colorado law school and you can find me Mike at the activist investor.com and Anna law.com colorado.edu. As we said, this is also proxy countdown with Matt and Damien. They are at free flow. One word dot LLC for your data. Some of the best board data Out There. Our podcast is produced and distributed by our good friend here Mattie. There he is. Thanks for listening to this wonderful crossover. We will talk again soon.