The frequency of proxy contests has risen 87% during the last 10 years, 112 2006-2010 vs 60 2001-2005 and 50% of dissidents have gained at least one board seat at listed companies. According to an article by Warren S. De Wied of Wilson Sonsini Goodrich & Rosati,
The most common types of proxy contests are those seeking board representation or control by activist stockholders seeking short-term profits. The proxy contest serves as a tool to drive change, including:
- Adding directors who are sympathetic to the activist’s goals or bring fresh perspectives to the board, orchestrating a change in executive management and securing other changes in corporate governance.
- Catalyzing changes in strategy, changes in capital allocation, a sale or break-up of the company or other value-enhancing transactions.