Fully Gained Support from Foreign Investors in a Proxy Fight
A financial company faced a challenge from dissidents intent on challenging the incumbent management. Leveraging its professional expertise, QIC assisted the company in responding swiftly. Through comprehensive and precise argumentation, as well as proactive engagement, QIC helped the company's management garner strong support from foreign institutional investors. The candidates nominated by the management received nearly 70% of the support.
Client Challenge
During the board director elections at the shareholders' meeting, both the management and dissidents fielded 15 candidates each, leading to intense competition. The dissidents criticized the company's recent performance, claiming it lagged behind peers in operational efficiency and suffered from corporate governance issues. Furthermore, due to the company's delayed response, ISS did not incorporate information from the management in its voting recommendation report. Therefore, the management needed to appeal to shareholders within a limited time frame, urging them not to follow ISS's voting recommendations. They aimed to demonstrate their commitment to corporate governance and communicate with foreign institutional investors to garner their support in the elections.
The QIC Advantage
Developing Communication Strategies and Materials: The content of communication with investors is crucial in a proxy contest. We assisted the company in elucidating its past operational performance, future strategies, and goals to investors. Additionally, we described how the board nominated by the management would lead the company toward sustainable operations. Furthermore, we helped the company refute the reformists' allegations, such as accusations of governance failures resulting in multiple regulatory penalties. However, in reality, regulatory penalties were not uncommon in the industry, and larger competitors often faced more penalties.
Engaging with Proxy Advisors and Institutional Investors: Many of the company's foreign shareholders followed ISS recommendations for voting. However, the ISS report did not adopt information from the management. QIC and its partners directly connected the company with investors through various channels and methods, striving to gain maximum support from investors.
Raising Awareness Among Domestic and Foreign Shareholders Through Media: In addition to domestic media exposure, QIC contacted foreign shareholder activist organizations to expose relevant information about the client's shareholders' meeting. The platform is subscribed to by many foreign institutional investors, thus raising awareness among them regarding the battle for control over the company's management.
Results
Obtaining Overwhelming Foreign Support
Despite ISS not adopting information from the management and supporting only one independent director candidate from their list, the management actively communicated with key foreign shareholders to seek their support. Additionally, Glass Lewis fully supported the candidates nominated by the management team. Ultimately, the candidates nominated by the management team received nearly 70% support from foreign investors.
