The Shareholder Activists' New Referee

There will be shareholder activism battles aplenty coming up, including some major ones like the Ron Burkle versus Barnes & Noble ($BKS) dust-up.  As this is a subject I’ve been covering here for awhile, I thought today’s profile of the new research head of Institutional Shareholder Services in the Wall Street Journal was kind of cool.

Chris Cernich, a former numbers guy from Ford Motor, is now being called one of the most powerful men on Wall Street.

From the WSJ:

The 46-year-old is the new head of M&A and proxy-contest research at proxy-advisory firm Institutional Shareholder Services Inc. For a mouthful of a title, the job is relatively simple. Mr. Cernich advises some of the world’s biggest institutional shareholders about how to vote shares on mergers, proxy contests and corporate governance issues.

The clients—largely mutual funds, insurance companies, and pensions—almost always follow ISS recommendations, largely because they can’t devote resources to the slew of shareholder votes arising in their portfolios.

That means Mr. Cernich can often represent the crucial swing votes that decide whether a merger is approved or dissident directors elected to a company board.

Proxy advisory firms weigh in on board votes and contests, essentially providing an opinion for voting shareholders as far as which candidates or measures are in their best interests.  There will be no shortage of these crucial decisions ahead of us.


Wall Street’s New Power Broker (WSJ)