Editing Proxy fight (section)

{{Short description|Shareholder contest for company control}}
{{distinguish|proxy war}}
A '''proxy fight''', '''proxy contest''' or '''proxy battle''' is an unfriendly contest for control over an organization. The event 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 voting|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 [[Proxy firm|agent]] to attend shareholder meetings and vote on their behalf. That agent is the shareholder's proxy.<ref>Klein, Ramseyer, and Bainbridge. Business Associations: Cases and Materials on Agency, Partnerships, and Corporations. (7th Ed.) Foundation Press.</ref>

In a proxy fight, [[Incumbent#In business|incumbent]] directors and management have the odds stacked in their favor over those trying to force the corporate change.<ref>{{cite book |last1=Webber |first1=David H. |author-link=David H. Webber |title=The Rise of the Working-Class Shareholder: Labor's Last Best Weapon |date=April 2018 |publisher=Harvard University Press |isbn=978-0-674-91946-4 |pages=46–47 |url=https://www.degruyter.com/viewbooktoc/product/511375 |access-date=15 November 2019 |url-access=subscription}}</ref> 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 fund]]s, which are successful more than 60% of the time.<ref>{{cite journal | url=http://onlinelibrary.wiley.com/doi/10.1111/j.1540-6261.2008.01432.x/full.html | doi=10.1111/j.1540-6261.2008.01432.x | title=Entrepreneurial Shareholder Activism: Hedge Funds and Other Private Investors | date=2009 | last1=Klein | first1=April | last2=Zur | first2=Emanuel | journal=The Journal of Finance | volume=64 | pages=187–229 }}</ref> However, previous studies have found that proxy fights are positively correlated with an increase in shareholder wealth.<ref>{{Cite journal|last1=Hirst|first1=Scott|last2=Bebchuk|first2=Lucian|date=2010-01-01|title=Private Ordering and the Proxy Access Debate|url=https://scholarship.law.bu.edu/faculty_scholarship/338|journal=The Harvard John M. Olin Discussion Paper Series|number=653}}</ref>'''{{rp|8}}'''