Episode Details

0:00 -- Intro.

1:34 -- Start of interview.

2:04 -- Derek's "origin story". He grew up in Chicago and graduated from WUSTL with a degree in applied math and an MBA in finance. From there he went to Capital One, "at the time it was at the forefront of making decisions with data". He then got his law degree from Stanford Law School (Class of '04). After graduating he joined WLR&K. From there he moved to hedge funds including Scoggin Capital (NY) and then Voce Capital (SF/Bay Area). In 2015, he joined Camberview Partners (now PJT Camberview) to head its activism defense practice. In 2019, he joined as a partner and co-chair of Sidley Austin's shareholder activism practice.

8:03 -- On what makes Derek's practice at Sidley Austin distinctive: "this is all we do." "We've seen over 100 proxy contests over the last 5 years." 

10:05 -- On this year's proxy season and activist campaigns. "We're back at pre-Covid levels, both in amount and mix of activism." "The reported campaigns are just the tip of the iceberg (many situations get resolved before they reach the public's eye)."

14:30 -- The impact of COVID-19 in the activism realm: "it was a very quick slow-down."

16:54 -- Why activists and companies continue to favor settlements over drawn-out proxy fights. (Per Lazard's H1 2022 Review of Shareholder Activism "[C]ontinuing 2021’s trend, a historically high proportion of Board seats (91% of the 75 total Board seats won) were secured via settlement agreements."

21:20 -- Activism in different size of companies (small, mid and large or mega caps). 

23:13 -- Some take-aways from the Exxon Mobil case (generally): "Size is not a defense, and use of ESG by activists as a core thesis." On the influence of the large institutional investors ("only a few individuals that control a big part of the vote.") [See The Future of Corporate Governance Part I: The Problem of Twelve by John Coates, 2018). 

28:53 -- On the impact of the current market downturn in activism. Targeting tech companies.

32:40 -- On activism targeting tech companies that are founder controlled (sometimes with dual-class share structures.) "Independent directors play a big and important role."

35:52 -- On contested M&A (hostile take-overs).

38:34 -- The impact of universal proxy cards in contested director elections. [See Sidley Austin's position on this topic]

42:47 -- Take-aways from shareholder proposals from this year's proxy season. 

44:24 -- Take-aways for directors (generally) from this year's proxy season. "The most important thing is universal proxy and what it will do to shareholder activism: there will be a much deeper focus on skills sets of individual directors (impacting Nom-Gov committee.)" "Be your own activist."