Why not charge activist investors a few thousand dollars for every proposal they offer?
Activist investors are submitting so many proposals for company ballots it may be time to put on restrictions on who can offer proposals and limit the number of those offered.
March 27, 2014 at 05:22 AM
9 minute read
The original version of this story was published on Law.com
Activist shareholders have become a major burden to some corporations by causing the company to spend as much as hundreds of thousands of dollars just to prepare for numerous ballots on diverse proposals.
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. Granted, some of their proposals have made sense and have helped to improve the company's bottom line, but other ideas simply clog up everyone's schedule.
In response, Leo Strine, the new chief justice of Delaware, has proposed the idea that activist shareholders – every time they come up with a proposal – must fork over a filing fee of anywhere from $2,000 to $5,000 if the proposal relates to economic issues, so that they “bear some of the costs they impose.”
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