BOSTON Feb 28 As corporations draw more heat
from their investors, Abe Friedman aims to put out some fires.
His San Francisco start-up, CamberView Partners, advises
companies on how top shareholders make voting decisions and how
to frame company messages.
Lately Friedman has been on a roll, adding clients like
Sprint and staff like former corporate governance chiefs from
State Street Corp and Wellington Management Co.
Friedman once held a similar job at BlackRock Inc
before moving to the other side of the table to help companies
grasp shareholder expectations on issues like mergers, board
structure or executive pay.
"Companies have not really understood how investors think
about governance issues," Friedman said. "The reason we exist is
the changes in the investor landscape," he said.
Friedman works at the confluence of two trends: rising
pressure on public companies from activist investors, and new
attention to governance from top mutual fund firms.
On the activist side, investors like Nelson Peltz and Carl
Icahn have made names for themselves agitating for changes at
the likes of PepsiCo Inc and eBay Inc,, to name
just two current examples.
The money flowing to activist funds promises to raise the
number of proxy contests, said Patrick McGurn, special counsel
for proxy adviser Institutional Shareholder Services. That could
boost demand for Friedman's services, he said.
ISS data shows there were 35 of these contests among U.S.
companies in 2013, up from 27 in 2012 and 18 in 2011.
"CamberView hopes to capitalize on the rising tide," McGurn
GETTING A HEARING
Mutual fund firms are also flexing their muscles as their
own investors pay more attention to how companies run
themselves. Firms have put new energy into the votes they cast
in corporate elections and told companies to clean up their
Vanguard Group Inc fund controller Glenn Booraem said it
sent out letters late last year to more than 300 companies - he
declined to name any - asking for changes like adopting majority
voting for directors, and some have already moved to do so.
Booraem and his counterparts at other asset managers get a
quick hearing from company executives because the fund firms are
often among companies' top shareholders. Those same governance
leaders are the talent that Friedman has targeted to work for
Recent hires include Andrew Letts, who joined CamberView
from State Street Corp in January; Rob Zivnuska, hired from
BlackRock in 2013; and Krystal Gaboury, from Wellington
Management Co, also last year.
Friedman also picked up Eileen Rominger, once director of
the division of investment management at the U.S. Securities and
Exchange Commission, and Ken Bertsch, previously of Morgan
Stanley and TIAA-CREF.
Friedman declined to discuss many financial details but said
CamberView's clients include 20 of the Fortune 100. One client,
Sprint Corp, last year faced questions about its plan to
be taken over by Japan's Softbank Corp.
Friedman helped Sprint understand what asset managers would
look for in areas like how the plan would protect shareholder
rights, said Sprint executives, including Chief Financial
Officer Joseph Euteneuer. "He has that special niche," he said.
Friedman tries to keep a lower profile compared with the
proxy solicitors and public-relations firms that companies also
hire to fend off activists or sway investors.
Spokespeople for BlackRock, State Street and Wellington
declined to comment, as did representatives for organizations
that had challenged Sprint, including private funds and
telecommunications firm Dish Network Corp.
Some skeptics wonder if CamberView can provide much insight
into the workings of institutional investors other than those
from which it has hired executives, or if companies will need to
hire CamberView more than once.
Friedman said his lineup of governance gurus knows plenty,
and makes a good fit for companies that need to reach out to
shareholders more than in the past. "Our success really does
show there's this change in the capital markets," he said.