Proxy fight

Short description: Shareholder contest for company control

Not to be confused with proxy war.

A proxy fight, proxy contest or proxy battle is an unfriendly contest for control over an organization. It is a form of shareholder activism.[1] This usually occurs when a corporation's stockholders develop opposition to some aspect of the corporate governance, often focusing on directorial and management positions. Corporate activists may attempt to persuade shareholders to use their proxy votes (i.e., votes by one individual or institution as the authorized representative of another) to install new management for any of a variety of reasons. Shareholders of a public corporation may appoint an agent to attend shareholder meetings and vote on their behalf. That agent is the shareholder's proxy.[2]

In a proxy fight, incumbent directors and management have the odds stacked in their favor over those trying to force the corporate change.[3] These incumbents use various corporate governance tactics to stay in power, including: staggering the boards (i.e., having different election years for different directors), controlling access to the corporation's money, and creating restrictive requirements in the bylaws. As a result, most proxy fights are unsuccessful; except those waged more recently by hedge funds, which are successful more than 60% of the time.[4] However, previous studies have found that proxy fights are positively correlated with an increase in shareholder wealth.[5]: 8

## Contents

* 1 Examples
* 2 Key players
* 3 See also
* 4 References

## Examples

* An acquiring company, frustrated by the takeover defenses of the management, may initiate a proxy fight to install a more compliant management of the target.
* Internal opponents to an impending takeover (viewing it will cut value or add much risk) may enter into a proxy fight. Such took place within Hewlett-Packard, before Carly Fiorina's management of that company in 2002 took over Compaq.[6]
* Absent any looming takeover, proxy fights emerge from shareholders unhappy with management, with or without legal and equitable derivative suit grounds, as with Carl Icahn's effort in 2005-06 to oust most of the board of Time Warner.[7]
* An early history of proxy fighting, detailing such 1950s battles as the fight for control of some of the largest U.S. corporations, including the Bank of America and the New York Central Railroad, can be found in David Karr's 1956 volume, Fight for Control.

## Key players

Due to their out-sized influence with many institutional investors, proxy advisors play a key role in many proxy fights. In many cases, the proxy firms end up determining the result of the contest.[8] The Securities Exchange Act of 1934 also gave the Securities and Exchange Commission (SEC) the power to regulate the solicitation of proxies.[9]: 4 Some of the rules the SEC has since proposed, like the universal proxy, have been controversial because opponents have suggested that they would increase the amount of proxy fights.[9]: 61

## See also

* Proxy statement

## References

1. ↑ Gold, Brandon; Klein, Ele; Dayan, Samuel (2025-06-18). "Shareholder Activism Developments in the 2025 Proxy Season" (in English). https://corpgov.law.harvard.edu/2025/06/18/shareholder-activism-developments-in-the-2025-proxy-season/.
2. ↑ Klein, Ramseyer, and Bainbridge. Business Associations: Cases and Materials on Agency, Partnerships, and Corporations. (7th Ed.) Foundation Press.
3. ↑ Webber, David H. (April 2018). The Rise of the Working-Class Shareholder: Labor's Last Best Weapon. Harvard University Press. pp. 46–47. ISBN 978-0-674-91946-4. https://www.degruyter.com/viewbooktoc/product/511375. Retrieved 15 November 2019.
4. ↑ Klein, April; Zur, Emanuel (2009). "Entrepreneurial Shareholder Activism: Hedge Funds and Other Private Investors". The Journal of Finance 64: 187–229. doi:10.1111/j.1540-6261.2008.01432.x. http://onlinelibrary.wiley.com/doi/10.1111/j.1540-6261.2008.01432.x/full.html.
5. ↑ Hirst, Scott; Bebchuk, Lucian (2010-01-01). "Private Ordering and the Proxy Access Debate". The Harvard John M. Olin Discussion Paper Series (653). https://scholarship.law.bu.edu/faculty_scholarship/338.
6. ↑ HP declares proxy win
7. ↑ Frank Biondi Joins Carl Icahn in Time Warner Proxy Fight
8. ↑ "Protecting Shareholders From Activist Proxies". 29 May 2015. https://www.wsj.com/articles/protecting-shareholders-from-activist-proxies-1432860067.
9. ↑ 9.0 9.1 Hirst, Scott (2018-04-01). "Universal Proxies". The Harvard Law School Program on Corporate Governance Discussion Paper (2016–11). https://scholarship.law.bu.edu/faculty_scholarship/344.

* v
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Corporate finance and investment banking

Capital structure|

* Convertible debt
* Exchangeable debt
* Mezzanine debt
* Pari passu
* Preferred equity
* Second lien debt
* Senior debt
* Senior secured debt
* Shareholder loan
* Stock
* Subordinated debt
* Warrant

Transactions
(terms/conditions)|

| Equity offerings|

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* Underwriting

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Mergers and
acquisitions|

* Buy side
* Control premium
* Demerger
* Divestment
* Drag-along right
* Management due diligence
* Managerial entrenchment
* Minority discount
* Pitch book
* Pre-emption right
* Proxy fight
* Post-merger integration
* Sell side
* Shareholder rights plan
* Special-purpose entity
* Special situation
* Squeeze-out
* Staggered board of directors
* Stock swap
* Super-majority amendment
* Tag-along right
* Takeover
* Reverse
* Tender offer

Leverage|

* Debt restructuring
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Valuation|

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* Adjusted present value
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