2025 Predictions: goodbye shareholder rights, the anti DEI movements wins (and loses), and woke retail zones

ESGDisclosureThe next wave of anti-ESG movement focuses on reduced disclosureDecrease in Director/NEO bio/photo disclosure in both proxy statements and corporate websitesAnti-DEI board compositionA sharp drop in new directors that are “diverse”An increase in overall board size; instead of outright replacing diverse directors, an increase of white male directors (who skew younger) are simply added to boardsMusk effectGreater re-domestication push: incorporate, headquarters, employees: SHPs reflect thisCEO pay reconfigured for higher payouts:Decrease in “longterm” CEO compensation performance periods to reflect shorter CEO tenure and general CEO greedNew players in proxy cage matches: toxic bros (maybe a bitcoin bro?)SEC moves to greatly restrict shareholders’ right to submit proposalsWill lead to a significant decrease in E & S proposals: both in SHPs submitted and SHPs removedSHP support percentage will continue to decreaseBut I think we will see a new active conservative SHP machine to go along with the two CentersBlame game/oversight greenwashingIncrease in board-level committees (partly to due a thing and partly to pretend a thing was being done): AI, Cybersecurity, Succession PlanningSharp increase in “co-” arrangements: co-CEO; co-Chairs, etc. in order to shift blamePwC’s figure that 49% of directors want someone on their board replaced (and 25% want two or more directors replaced) increases to 66% and 44%GeneralThe next “Bud Light” is… Kontoor Brands (Lee/Wrangler)Something deemed “woke” triggers the MAGA mob and when they discover in the proxy that the company “Increased board gender diversity in 2024” and was “undertaking a search for a potential additional gender diverse director” all hell breaks loose.Year of ZuckEven more so if TikTok failsThe obvious prediction is Musk buys a media company but maybe I think Zuck makes a pivotal acquisitionElon fades due to Tesla sucking and Trump battlesYear of Drones: a CEO is fired for either accidental or illegal misuse of dronesSignificant increase in the “banning” of social media and teen smartphone usePeopleBuffett diesTim Cook steps downAfter more than a decade of tenure, Doug McMillon begins leadership transition from Wal-Mart with eyes on 2028 PresidencyAI. Also Generative AI. And headwinds.Texas is the new FloridaTexas sees an influx of incorporation under the pretense of “regulation easing”, but every company that moves is basically just racistGoodbye shareholder rights, we hardly knew theeAbolish say on pay (not even advisory!)Every board moves to classified boardWhy not, investors don’t challenge a single director anyway!Proxy voting policies are made illegal, as voting against the company in any way is considered discrimination against companiesAnti-ESG bills keep forgetting that G is in ESG… and they’re banning it, which means no proxy voting at allWyoming includes language stating “assessing corporate board or employment” as “evidence of” having a social agenda, and therefore bannedCostco isn’t aloneThe pushback against DEI pushback will come from the few, the strong, and the highly democratic boards with strong female power:1,023 mega, large, and mid cap US companies721 have diversity programs of some kind that are disclosed644 have disclosed targets or internal training around DEIOnly 94 companies have BOTH highly democratic boards (where power is dispersed evenly) AND top quartile female power on the board AND DEI programsThe most democratic is Costco - 32% female power (top quartile) and less than 3% deviation of power (4th most democratic in the entire US, tops for DEILayer in strong stock returns, and here are the companies who are likely to be targeted and push back:Procter & Gamble1yr/5yr up 8/31%Sell Braun, Gillette, Old Spice - man brands39% female power, 4% power deviationAltria1/5yr up 3/25%Cigarettes are still manly47% female power, 5% deviationMen FINALLY get some powerThe Meta Method: increase board size, add all men - went from one of the more gender diverse boards (fake, but still) to BELOW AVERAGE in one cycleThere are NINE board that by adding ONE more dude, they would become:Less than 50% femaleFrom positive to negative power gapRemain democratic (so dudes get a say) - here are the large caps:Cardinal HealthHPStryker CorpHonorable mention: Cracker Barrel, which is one Robbie Starbuck away from negating female powerThe US vs. Europe divide NARROWS… as the EU moves hard rightWatch 2025 elections: Norway parliament, German federal, Greece presidential, Czech parliament, Irish presidential (in which Conor McGregor is a viable candidate)The frameworks and regulations around environmental and ESG issues were so badly constructed, it’s the perfect storm for pushback and rollback - watch the EU undo everything to catch up with the US in the race to the bottomThe rise of the director activistA new model in investor activism - director activism, not corporate activism - built on how people perform and whether they have the skills they should have on a particular boardFinding underperforming PEOPLE and replacing themFind underperforming companiesFind underperforming teams - globally…3,406 companies out of more than 10,000 with at least one director who has historically (and currently) performed in the BOTTOM THIRD of all directors on TSR726 of them, MORE THAN HALF THE BOARD is comprised of bottom dwelling directors196 of them MORE THAN HALF THE BOARD is comprised of bottom dwellers for BOTH TSR and carbonFind knowledge gapsIn the 196, Frontier Airlines has 8 directors with Econ backgrounds, but 4 with mechanical backgrounds, 2 with safety, and 2 with transportation backgroundsM&T Bank’s largest expense is people… but there are ZERO directors with deep knowledge in HR or personnel management for highly paid employeesBegin a data driven vote campaign for cognitive diversityYou don’t need an absurdly long powerpoint presentation with backing from Jeff Sonnenfeld to achieve this - your narrative is simple: we hire based on meritocracy, you guys stink.The absurd might not be so absurd?AIAI sues a company for discriminationIt was unfairly taught DEIAI is added to a board of directorsAnd labelled as “gender neutral” for the diversity matrixAI avatars to go to meetings for you, including your HR meetingsCowardsIn the wake of Brian Thomson’s murder, Mark Zuckerberg figures out the new best use of the Metaverse: a place for boards and executives to meet without leaving their housesCompanies begin disclosing whether directors have guns, the horsepower of the engines of their cars, and whether they are “white” or a new race called “extra white”WokeThe first “woke parallel economy” investors begin popping up to combat the anti-woke parallel economy investorsWalled-off “woke zones” - like in stores that sold porn mags behind the counter, you can now request to enter the “woke zones” in stores where they keep pride merch and feminine products, but you need an ID to enter and children under 17 must be accompanied by an adult