A universal proxy may benefit public companies in certain contested director elections, but the ability to use this tool may depend on a company’s bylaws.

Key Points -

..In contested director elections, the binary nature of the current US proxy voting regime requires a choice between either a company’s or an activist’s slate without the ability to “mix and match” among nominees. This regime can impact voting, and thus outcomes, in proxy contests, creating risk that the company might lose its entire slate in a contested election.

..Universal proxies allow stockholders to vote for nominees of their choosing from both the company and activist slates, mitigating binary “win or lose” outcomes.