Benefits and Drawbacks
III) Preliminary results regarding transaction activism
1) Means of active shareholders
The analysis of U.S.-American law in the context of transaction activism has proven the following: apart from collective action issues, the impact of shareholders on corporate transaction decisions through formal means is very limited. Shareholders have the right to participate in corporate decision-making by approving the decision only in a very limited number of fundamental transactions, mainly some merger constellations. The shareholders’ initiation rights in fundamental and indeed in all transaction decisions are limited. They are restricted to precatory shareholder proposals. Even if the shareholder meeting approves the proposal by a significant percentage, the administration decides whether to implement the proposal. The result is similar for shareholder means granting them the opportunity to indirectly impact these decisions through the use of effective accountability means applicable to the responsible administration. Corporate statutes and securities laws do not provide shareholders with the means necessary to effectively remove members of the administration who are responsible for opportunistic transaction decisions. The nomination and election rules and their recent and expected amendments have for a long time effectively kept and will continue to keep shareholders from effectively exercising their franchise. The minimum mandatory proxy access rule, recently adopted on the federal level (and currently not in force), granting shareholders access ← 209 | 210 → who have held a three-percent stake for more than three years, has limited the expectations that effectiveness will be significantly increased. In addition, the proxy rules relevant for direct and indirect impact have been...