What is a proxy fight?
A contest for control over an organisation involving a group of shareholders joining forces to gather enough proxy votes to win a corporate vote and effect change in a company, usually by replacing board members.
Where have you heard about proxy fights?
They are often talked about in the context of company takeovers and can be widely covered in the media depending on the business involved. Investors are advised to stay abreast of proxy fights as they can heavily influence a company's stock price.
What you need to know about proxy fights.
Proxy fights usually come about because some shareholders are unhappy with a specific aspect of how a company is run and their suggested changes are met with resistance from the current board. The activist shareholders then try to persuade other shareholders to let them use their proxy votes to support their proposed changes.
The typical objective of a proxy fight is to change management, however, they can also be driven by a desire to spin-off assets or return cash to shareholders.