Guideline
We will support proposals that seek to prevent the payment of "greenmail" to an unwanted purchaser of the corporation.
We will not support the payment of "greenmail."
Discussion
"Greenmail" is the payment from corporate funds of a premium price to selected shareholders (often an unwanted purchaser of a company) without the opportunity for all shareholders to participate in such a purchase program. Because these purchases are usually done at a price above the then-current market price of the company’s stock, there is transfer of value from the company to one shareholder or group of shareholders, placing the remaining shareholders at an economic disadvantage.
Anti-greenmail resolutions generally require shareholder approval of a major share repurchase at prices that exceed the market, unless the same purchase price is offered to all of the corporation’s owners.
|
