According to a WSJ analysis of significant settlements between companies and activist investors between 2015 and 2017, in view of their substantial impact on board decision-making/action, settlements commonly include key board committee appointments for activist director nominees - with the compensation committee being the most coveted key committee.
Of 82 activist settlements at >$1 billion companies, 51 included specific committee appointments - with more than half of those being compensation committee appointments. Other desired committees for activist directors reportedly include those that explore strategic alternatives and CEO search committees.
The committee roles activist investors negotiated in prominent board settlements over the last three years:
Managing director of activist investor Legion Partners Asset Management Ted White noted: "If you really want to force substantive change, being on a key committee is where you have to be.’’