Annual shareholder meetings held by U.S. companies continue to hear from activist shareholders.
Recent data cited by the Financial Times showed that 321 big companies in 2013 were subject to 582 proposals, compared to 477 proposals following the economic crisis.
How much do the activist votes cost? The SEC a few years ago estimated the cost to assess, respond, distribute and tabulate support for a proposal at $87,000, the Financial Times said. “It is not an overwhelming burden for a corporation but it is a pain, and an unnecessary diversion of attention,” Martin Lipton, a corporate lawyer and founder of Wachtell Lipton, told the newspaper.
Other estimates say companies can spend as much as hundreds of thousands of dollars just to prepare for numerous ballots on diverse proposals from shareholders, InsideCounselreported. The process also takes time away from busy attorneys, finance specialists, accountants and others in a corporation who must review the proposals and prepare the votes.