Corporate Governance Shareholder Rights & Activism 3

Question 1

What is a 'white knight' in the context of hostile takeovers?

Accepted Answer

A friendly acquirer sought by the target company's board to avoid a hostile bid

Answer

An activist investor who sides with incumbent management

Answer

An independent financial advisor retained by the board

Answer

A regulatory body that blocks unsolicited bids

Question 2

Which SEC filing must activist investors use to publicly disclose an ownership stake exceeding 5% with intent to influence the company?

Accepted Answer

Schedule 13D

Answer

Schedule 13G

Answer

Form 4

Answer

Form 8-K

Question 3

What is an 'empty voting' problem in corporate governance?

Accepted Answer

When a shareholder holds voting rights without corresponding economic interest

Answer

When directors abstain from voting on all contested matters

Answer

When proxy advisors vote on behalf of shareholders who miss deadlines

Answer

When broker-dealers cast votes without client instructions

Question 4

What does 'universal proxy' allow shareholders to do in director elections?

Accepted Answer

Vote for any combination of management and dissident director nominees on a single ballot

Answer

Grant proxy voting authority to any registered shareholder

Answer

Nominate directors at any time without prior notice

Answer

Override a staggered board through a single election

Question 5

What is a 'golden parachute' in executive compensation governance?

Accepted Answer

A large severance package triggered when an executive is terminated following a change of control

Answer

A stock option plan awarded at IPO to founding executives

Answer

A bonus paid to executives when the company achieves a market cap milestone

Answer

A deferred compensation plan funded through company pension contributions

Question 6

What is 'stewardship' in the context of institutional investors?

Accepted Answer

The responsible management of voting rights and shareholder engagement to protect long-term value

Answer

The legal obligation of fund managers to trade on non-public information

Answer

A requirement for pension funds to invest in government bonds

Answer

The duty of institutional investors to maximize quarterly returns