PRIVILEGED AND CONFIDENTIAL PROTECTED BY ATTORNEY-CLIENT PRIVILEGE AND WORK PRODUCT DOCTRINE
CALDERWOOD & HARKNESS LLP 787 Seventh Avenue New York, New York 10019
MEMORANDUM
May 1, 2024
TO: Board of Directors, Aurelius Global Media Group PLC Special Committee (Tobias Kessler, Chair; Lucinda Farrow-Grant; Dr. Anwen Llewellyn)
FROM: Calderwood & Harkness LLP
RE: Shareholder Base Analysis and Vote Projection — 2024 Annual General Meeting (June 7, 2024)
MATTER NO.: 1017-00002
PREPARED BY: Audrey Zhou (Lead Associate) and Brendan Walsh (Working Associate), under the direction of Nathaniel Bower (Responsible Partner) and Colette Whitman (Billing Partner)
This memorandum constitutes a privileged and confidential attorney-client communication and attorney work product. It has been prepared by Calderwood & Harkness LLP at the request of and for the sole benefit of the Board of Directors and the Special Committee of Aurelius Global Media Group PLC. This memorandum should not be disclosed to any third party without the prior written consent of Calderwood & Harkness LLP. Unauthorized disclosure may result in a waiver of applicable privileges.
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I. Executive Summary
The purpose of this memorandum is to provide the Board of Directors and the Special Committee of Aurelius Global Media Group PLC ("AGMG" or the "Company") with a comprehensive analysis of the Company's shareholder base and projected vote outcomes at the Annual General Meeting (the "AGM") scheduled for June 7, 2024, in connection with the contested election of directors initiated by Corvus Peak Capital Partners LP ("Corvus Peak" or the "Activist").
The context for this analysis is the proxy contest launched by Corvus Peak, which has nominated three director candidates — Malcolm Trask, Vanessa Loring, and Dr. Raymond Chu — for election at the 2024 AGM in opposition to three incumbent directors. The Company's preliminary proxy statement was filed with the Securities and Exchange Commission on April 5, 2024, and Corvus Peak's preliminary proxy statement was filed on April 1, 2024. Definitive proxy statements from both the Company and Corvus Peak are expected to be filed in early May 2024.
After extensive analysis of the Company's shareholder register, historical voting patterns, proxy advisor policy frameworks, and current market dynamics, we present the following key findings:
Key Finding: The outcome of the proxy contest is highly uncertain and depends on the voting decisions of a relatively small number of large institutional holders. In particular, we have identified Windermere Pension Trust, a California-based public pension fund holding approximately 4.4% of the Company's outstanding shares, as a critical swing voter whose decision is likely to determine whether Corvus Peak gains two or three board seats.
Key Risk: Proxy advisory firm recommendations from Cobalt Ridge Solutions ("ISS") and Adriatic Services Inc. ("Tarrant Partners LLC"), expected in mid-to-late May 2024, could materially shift institutional voting patterns. Our preliminary analysis of the applicable proxy advisory firm policy frameworks suggests that both ISS and Tarrant Partners LLC are likely to recommend in favor of at least some Corvus Peak nominees, given the Company's governance profile, recent stock underperformance relative to its media and entertainment peer group, and the controversy surrounding the CEO succession process following the resignation of Marcus Vane on March 8, 2024.
Recommendation: In light of the foregoing, we recommend that the Board immediately intensify direct shareholder engagement efforts, focusing on the top 20 institutional holders identified in this memorandum. Engagement with Windermere Pension Trust should be treated as the single highest priority. Additionally, the Board should prepare contingency settlement strategies in the event that vote projections deteriorate following the publication of proxy advisor recommendations. Given that our probability-weighted analysis indicates an expected outcome in which Corvus Peak gains approximately 2.7 of 3 targeted seats, the Board should give serious consideration to proactive settlement negotiations in order to preserve greater influence over the composition and direction of the reconstituted board, particularly with respect to the ongoing CEO succession process.
The remainder of this memorandum is organized as follows: Part II provides relevant background on the Company, its share capital, and the proxy contest; Part III presents a detailed analysis of the Company's shareholder base composition; Part IV addresses voting mechanics and thresholds; Part V provides our preliminary assessment of likely ISS and Tarrant Partners LLC recommendations; Part VI sets forth our vote projection scenarios; Part VII offers shareholder engagement strategy recommendations; Part VIII addresses settlement considerations; and Part IX identifies key risk factors and caveats.
II. Background
A. Corporate and Share Capital Overview
Aurelius Global Media Group PLC is a global media and entertainment company incorporated under the laws of the State of Delaware and registered as an overseas company in England and Wales. The Company maintains a dual listing on the New York Stock Exchange (ticker: AGMG) and the London Stock Exchange Main Market premium segment (ticker: AGMG.L). The Company's principal executive office and global headquarters are located at 14 Sceptre Row, London EC2V 7QN, United Kingdom.
As of the record date established in the Company's preliminary proxy statement, the Company has 412,600,000 shares of common stock outstanding. Based on the closing price as of March 1, 2024, the Company's market capitalization was approximately £6.82 billion, or approximately $8.65 billion at the then-prevailing exchange rate of $1.2683 per pound sterling.
The Company's financial performance for the fiscal year ended December 31, 2023 reflects total revenue of approximately $4.37 billion and adjusted EBITDA of approximately $812 million, representing an EBITDA margin of approximately 18.6%. The Company employs approximately 23,400 individuals worldwide.
The Company operates through four reportable business segments:
(i) Streaming & Digital Content, which accounted for approximately 42% of total revenue ($1,835.4 million) in FY 2023, and encompasses the Company's direct-to-consumer streaming platform, Luminos, as well as digital content licensing and original programming;
(ii) Live Entertainment & Events, which accounted for approximately 24% of total revenue ($1,048.8 million), and includes live event production, venue management, and ticketing operations;
(iii) E-Commerce & Merchandising, which accounted for approximately 19% of total revenue ($830.3 million), and includes the Company's consumer products, licensed merchandise, and direct-to-consumer e-commerce operations; and
(iv) Advertising & Brand Partnerships, which accounted for approximately 15% of total revenue ($655.5 million), and encompasses advertising sales across the Company's digital and broadcast platforms and integrated brand partnership arrangements.
The Company's transfer agent is Atlas Shareholder Services Inc., located at 6201 15th Avenue, Brooklyn, New York 11219. Atlas maintains the Company's shareholder register and administers the proxy distribution and vote tabulation processes for shares traded on the NYSE. Shares traded on the London Stock Exchange are held through the CREST settlement system via depository interests, with voting for LSE-traded shares administered through the nominee chain and ultimately processed through Atlas Shareholder Services.
B. The Proxy Contest
The current proxy contest has its origins in the public activism campaign launched by Corvus Peak Capital Partners LP in early 2024. The key events in the timeline of the proxy contest are as follows:
January 18, 2024: Corvus Peak filed an initial Schedule 13D with the SEC disclosing beneficial ownership of approximately 6.1% of the Company's outstanding common shares. The filing identified Corvus Peak's investment thesis as centered on concerns regarding the Company's governance practices, capital allocation, and strategic direction, but did not at that time disclose an intent to seek board representation.
February 12, 2024: Corvus Peak delivered a formal demand letter to the Board of Directors requesting: (i) the appointment of two new independent directors with media and technology operating experience; (ii) the initiation of a comprehensive strategic review of the Company's business segments and capital allocation priorities; and (iii) the establishment of a formal CEO succession plan, citing what Corvus Peak characterized as a lack of transparency regarding executive leadership continuity.
February 26, 2024: Corvus Peak filed an amended Schedule 13D disclosing an increase in its beneficial ownership to approximately 8.7% of outstanding shares, representing 35,896,200 shares. The amended filing further disclosed Corvus Peak's intent to nominate three director candidates for election at the 2024 AGM.
March 1, 2024: Corvus Peak submitted formal director nominations within the advance notice window established by the Company's Amended and Restated Bylaws, which required nominations to be submitted no earlier than February 10, 2024 and no later than March 11, 2024. The three nominees put forward by Corvus Peak are:
• Malcolm Trask, age 62, former Chief Executive Officer of Archway Digital Holdings Inc., a publicly traded digital media company, where he served from 2011 to 2019. Mr. Trask currently serves as a senior advisor to several media and technology companies and as a member of the board of directors of two private technology firms.
• Vanessa Loring, age 47, Managing Director at Corvus Peak Capital Partners LP, where she leads the firm's media and entertainment investment practice. Prior to joining Corvus Peak, Ms. Loring held senior strategy and operations roles at Sundial Group and Quillon Industries.
• Dr. Raymond Chu, age 55, former President of Helix Media Networks Inc. and currently a professor of practice at the Columbia University Graduate School of Business, where he teaches courses on media industry strategy and digital transformation. Dr. Chu holds a Ph.D. in economics from MIT.
March 8, 2024: Marcus Vane resigned from his position as Chief Executive Officer of the Company, effective immediately. The Board of Directors designated Priya Nair-Whitfield, the Company's Chief Operating Officer and President of the Streaming & Digital Content segment, as Interim CEO pending the completion of a formal CEO search process. The Board simultaneously announced the engagement of Hargrove Tate & Partners, a leading executive search firm, to conduct a comprehensive search for a permanent CEO.
April 1, 2024: Corvus Peak filed its preliminary proxy statement with the SEC.
April 5, 2024: The Company filed its preliminary proxy statement with the SEC.
April 10, 2024: The Board of Directors publicly announced that it had considered and rejected the adoption of a shareholder rights plan (commonly known as a "poison pill"), stating that the Board believed such a measure was not in the best interests of all shareholders and that the Board remained committed to open dialogue with all shareholders, including Corvus Peak.
April 15, 2024: Corvus Peak published an open letter to the Company's shareholders criticizing the Board's designation of Priya Nair-Whitfield as Interim CEO, characterizing the appointment as a "predetermined outcome" that effectively circumvented the need for a genuine CEO search process. The letter argued that the Board's actions demonstrated a pattern of entrenchment and resistance to accountability.
The election of directors at the 2024 AGM is governed by a plurality voting standard. Under the Company's Amended and Restated Bylaws, effective as of March 22, 2022, majority voting applies to uncontested elections, but plurality voting is triggered automatically in the event of a contested election — defined as any election in which the number of nominees exceeds the number of seats to be filled. Because Corvus Peak has nominated three additional candidates, the plurality standard will apply. The Company's board was fully declassified in 2022, and accordingly all directors stand for election annually.
Corvus Peak has retained Falconer Strauss LLC as its proxy solicitor for the contest. The engagement is being led by Derek Huang, a partner at Falconer Strauss who has extensive experience in contested proxy solicitations. AGMG management has retained Citrine Advisory Group Inc. as its proxy solicitor, with the engagement led by Sandra Eriksson, Managing Director, who has similarly deep experience in proxy contest defense and shareholder engagement.
C. Board Seats at Stake
Prior to the commencement of the proxy contest, the Board of Directors of AGMG consisted of 10 voting seats. Following the resignation of Marcus Vane on March 8, 2024, one seat became vacant. The Board elected not to fill this vacancy prior to the AGM, and accordingly nine directors currently serve on the Board. At the 2024 AGM, all 10 seats will be up for election.
Corvus Peak's three nominees — Malcolm Trask, Vanessa Loring, and Dr. Raymond Chu — are being nominated in opposition to three specific incumbent directors: Tobias Kessler, Hugh Pemberton, and Sofia Delgado-Ríos. These are the three directors whose seats Corvus Peak has specifically targeted, and Corvus Peak's proxy card encourages shareholders to vote FOR Trask, Loring, and Chu and to WITHHOLD votes from Kessler, Pemberton, and Delgado-Ríos.
Under the plurality voting standard applicable to this contested election, the practical mechanics operate as follows: there are 10 seats to be filled at the AGM, and 13 candidates have been nominated (7 management nominees who are not targeted by Corvus Peak, plus the 3 targeted incumbents, plus the 3 Corvus Peak nominees). Shareholders may vote FOR up to 10 of the 13 nominees. The 10 candidates receiving the highest number of FOR votes will be elected to the Board. In practice, this means that the contest will turn on whether the three Corvus Peak nominees receive more FOR votes than the three targeted incumbents.
It is important to note the practical structure of the dual solicitation. Each shareholder will receive two proxy cards: one from AGMG management soliciting votes FOR all 10 management nominees, and one from Corvus Peak soliciting votes FOR the 7 uncontested management nominees plus the 3 Corvus Peak nominees. Shareholders are free to use either proxy card and may "mix and match" their votes across the two cards, voting FOR some management nominees and some Corvus Peak nominees. If a shareholder submits both proxy cards, the later-dated card will control. This mix-and-match dynamic introduces additional complexity into the vote projection analysis, as some shareholders may choose to support one or two Corvus Peak nominees while voting for the remaining incumbent targets.
III. Shareholder Base Composition
A. Overview of Ownership Structure
Based on our review of the Company's most recent shareholder register (obtained from Atlas Shareholder Services), public filings including Schedule 13D, Schedule 13G, and Form 13F filings with the SEC, and data compiled by Citrine Advisory Group, the Company's shareholder base is composed as follows:
• Institutional investors (actively managed): Approximately 40–45% of outstanding shares, including both long-only and hedge fund holders. This category encompasses the major identified holders discussed in detail below, as well as a broad range of smaller institutional positions.
• Passive index funds and ETFs: Approximately 25–30% of outstanding shares (approximately 103,150,000 to 123,780,000 shares). These holders include the major index fund complexes that hold shares as a result of the Company's inclusion in various equity indices. Passive holders typically delegate voting decisions to internal governance teams, which in turn frequently rely on proxy advisory firm recommendations as a primary input.
• Retail shareholders: Approximately 20–22% of outstanding shares (approximately 82,520,000 to 90,772,000 shares). Retail holders include individual investors holding shares through brokerage accounts, employee stock purchase plan participants, and former employees holding shares received through equity compensation. Retail participation rates in proxy contests are historically low, typically in the range of 30–40%, and retail holders who do vote tend to favor management in the absence of a compelling contrary narrative.
• Management and Board insiders: Approximately 3.2% of outstanding shares (13,203,200 shares), as described in detail below.
• Other/unclassified: The remaining shares (approximately 2–5%) are held by range holders, including family offices, sovereign wealth funds with small positions, and custodial accounts where the beneficial owner cannot be readily identified from available data.
It bears noting that the Company's dual listing on both the NYSE and the London Stock Exchange introduces certain complexities into the shareholder identification process. A portion of the Company's shares are held through the CREST depository interest system on the LSE. Holders of CREST depository interests vote through the nominee chain, and their votes are ultimately tabulated by Atlas Shareholder Services. While we have endeavored to identify the ultimate beneficial owners of shares held through CREST, there may be some holders — particularly smaller UK-based institutional and retail holders — whose voting intentions cannot be determined with precision from available data.
B. Top Institutional Holders — Detailed Profiles
The following sections provide detailed profiles of the most significant holders in the Company's shareholder base, with particular focus on their likely voting behavior in the contested election.
1. Corvus Peak Capital Partners LP
Corvus Peak is the activist proponent in this proxy contest and has publicly committed to voting its entire position FOR the Corvus Peak slate (Trask, Loring, and Chu) and AGAINST/WITHHOLD on the three targeted incumbents (Kessler, Pemberton, and Delgado-Ríos). Corvus Peak has retained Falconer Strauss LLC to conduct an active proxy solicitation on behalf of its nominees.
Corvus Peak is a multi-strategy hedge fund with a well-documented history of activist campaigns in the media, technology, and consumer sectors. The firm's prior campaigns include a successful board reconstitution effort at Valiant Media Inc. (2021) and a strategic review campaign at Redstone Entertainment Holdings (2022) that resulted in the sale of the company's European broadcast assets. Damien Solberg is a well-known activist investor who is frequently quoted in the financial press and has developed a reputation for thoroughness in campaign preparation.
Assessment: All 35,896,200 shares are locked FOR the Corvus Peak slate. Corvus Peak's active solicitation efforts through Falconer Strauss are expected to include extensive direct outreach to institutional holders, paid advertising, and public communications designed to build momentum for the activist slate. We note that Corvus Peak's average cost basis of $20.97 per share is significantly below the Company's current trading price, suggesting meaningful unrealized gains that provide Corvus Peak with a strong financial incentive to pursue the campaign to conclusion.
2. Thorne Capital Management LP
Thorne Capital Management is a long-only institutional asset management firm with approximately $18 billion in assets under management. The firm is known for a concentrated investment approach focused on large-cap media, technology, and telecommunications companies. Oliver Thorne founded the firm in 1998 and has maintained a position in AGMG common stock for approximately seven years.
With respect to voting tendencies, Thorne Capital has historically voted with management in uncontested director elections and routine proxy matters. However, in contested elections at companies within its portfolio, Thorne Capital has followed ISS recommendations approximately 80% of the time in comparable situations, based on our review of publicly available voting records filed on Form N-PX. This pattern suggests that Thorne Capital's governance team conducts independent analysis but accords significant weight to ISS recommendations when forming voting decisions in contested elections.
A potentially significant factor is that Oliver Thorne maintains an informal personal relationship with Dame Elspeth Greenvale, the Company's Non-Executive Chairperson, through overlapping participation in industry board circles and philanthropic organizations. While this relationship does not guarantee a management-aligned vote, it does provide a channel for direct engagement that could prove influential, particularly if the Company can present a compelling governance narrative prior to the publication of ISS recommendations.
Assessment: Thorne Capital's 25,993,800 shares are likely to follow the ISS recommendation, but the holder may break for management if direct engagement by Dame Greenvale or other Board members is successful in communicating the Board's governance responsiveness and strategic vision. We categorize Thorne Capital as "persuadable — ISS-dependent." Engagement efforts should be prioritized in the May 1–15 window, before ISS publishes its recommendation.
3. Ridgeway Asset Management Ltd.
Ridgeway Asset Management is a UK-based institutional asset manager with approximately £14 billion in assets under management and a well-established reputation for active engagement on corporate governance matters. The firm is a signatory to the UK Stewardship Code and has publicly committed to the principles of responsible investment, including the exercise of voting rights in a manner consistent with promoting long-term shareholder value and sound governance practices.
Ridgeway's voting history reflects a strong governance orientation. The firm has historically been supportive of board refreshment initiatives and has publicly supported activist nominees in prior contested elections at FTSE-listed companies, including a 2022 campaign at Meridian Publishing Group plc in which Ridgeway voted in favor of all three dissident nominees. Ridgeway's Head of Governance, Fiona Ashcroft, has published articles and spoken at industry conferences advocating for greater board accountability and transparency in CEO succession processes — both of which are central themes of Corvus Peak's campaign.
We note that Ridgeway's holding in AGMG may be subject to FCA Disclosure Guidance and Transparency Rules (DTR 5) major shareholding notification obligations given the Company's premium listing on the London Stock Exchange Main Market. Any material increase or decrease in Ridgeway's holding would need to be publicly disclosed, providing the Company with visibility into potential ownership changes.
Assessment: Based on Ridgeway's published governance principles, its voting history in prior contested elections, and the alignment between its stated governance priorities and Corvus Peak's campaign themes, we assess that there is an elevated risk that Ridgeway will support all three Corvus Peak nominees. We categorize Ridgeway as "leaning activist." Direct engagement with Fiona Ashcroft is recommended urgently, although we caution that the Company's messaging will need to be carefully calibrated to address Ridgeway's governance concerns directly. Engagement should be conducted through the Company's London-based investor relations team and, if possible, should involve Dame Elspeth Greenvale in her capacity as Non-Executive Chairperson, given the UK institutional norms around board-level engagement.
4. Windermere Pension Trust
Windermere Pension Trust is a California-based public employee retirement system with approximately $42 billion in total plan assets. The fund has a well-documented focus on corporate governance issues and has published detailed proxy voting guidelines that emphasize board accountability, CEO succession transparency, alignment of executive compensation with long-term performance, and the protection of shareholder rights. Windermere's governance team, led by Bernard Napier, has been active in engaging with portfolio companies on governance matters and has not hesitated to support activist campaigns when the fund's governance team has determined that activism serves the long-term interests of beneficiaries.
Based on our review of Windermere's publicly available voting records, the fund has supported activist nominees in 3 of the last 5 contested elections at companies of comparable size and governance profile. Windermere frequently aligns its votes with ISS and Tarrant Partners LLC recommendations, though its governance team conducts independent analysis and does not follow advisory firm recommendations mechanically.
Assessment: We have identified Windermere Pension Trust as the single most critical swing voter in this proxy contest. Windermere's 18,154,400 shares represent approximately 4.4% of the Company's outstanding shares and approximately 5.2% of the expected voted share pool (assuming 85% turnout). As demonstrated in the sensitivity analysis in Section VI.E below, the decision by Windermere to vote for or against the Corvus Peak slate could be decisive in determining whether Corvus Peak gains two or three board seats.
As of the date of this memorandum, Windermere has not publicly declared a voting position in the AGMG proxy contest. Engagement with Bernard Napier should be the Board's single highest priority. We recommend that Dame Elspeth Greenvale and/or Priya Nair-Whitfield conduct direct outreach to Bernard Napier's office to discuss the Board's governance actions, the CEO search process, and the Company's strategic direction.
Risk Factor: If Windermere publicly announces support for the Corvus Peak slate prior to the AGM, this could trigger a cascade effect among other institutional holders — particularly passive fund governance teams and smaller actively managed holders — who may interpret Windermere's endorsement as a signal that the governance community has coalesced behind the activist position. Such a cascade would materially diminish the Board's prospects of retaining the three targeted seats.
5. Management and Board Insiders
The Company's management and Board insiders collectively hold approximately 3.2% of outstanding shares. The breakdown of insider holdings is as follows:
• Hugh Pemberton (Non-Executive Director, Co-Founder): 2.1% — 8,664,600 shares. Mr. Pemberton is the largest individual insider holder and one of the three directors targeted by Corvus Peak's nominations. His substantial holding provides a meaningful block of shares that will be voted for the management slate, though we note the inherent tension in the fact that Mr. Pemberton is himself at risk of losing his board seat.
• Priya Nair-Whitfield (Interim CEO, COO, and President of Streaming & Digital Content): Holdings included in the combined "other insiders" category below.
• Garrett Voss (Chief Financial Officer): Holdings included in the combined "other insiders" category below.
• Remaining directors and named executive officers (combined): Approximately 1.1% — 4,538,600 shares.
Assessment: All 13,203,200 insider-held shares are expected to be voted FOR the management slate. Hugh Pemberton's 8,664,600 shares are particularly significant, as Pemberton remains strongly incentivized to vote for the management slate given that his own seat is at stake. However, we note that Pemberton's shares alone are insufficient to offset the voting power of the major institutional holders discussed above, and the insider block represents only approximately 3.8% of the expected voted share pool.
C. Remaining Institutional Holders (Estimated)
Beyond the five major holder categories profiled above, the Company's shareholder base includes a substantial number of additional institutional holders whose collective voting behavior will significantly influence the election outcome.
Passive Index Funds and ETFs. We estimate that passive index funds and ETFs hold approximately 25–30% of the Company's outstanding shares, or approximately 103,150,000 to 123,780,000 shares. These holdings are distributed across the major index fund families, including Dunmore Asset Advisors (iShares), Marlowe Asset Management, Ashbury Asset Advisors (SPDR), and other index providers that hold AGMG shares as a result of the Company's inclusion in the S&P 500, the FTSE 100, and various sector-specific and thematic indices.
Passive funds typically delegate proxy voting decisions to internal governance teams, which in turn rely heavily — though not exclusively — on proxy advisory firm recommendations. ISS is the dominant advisory firm for passive fund governance teams, and our estimate is that approximately 60–75% of passive fund shares will follow ISS recommendations in the contested election, with the balance conducting independent analysis or following Tarrant Partners LLC. Given the large aggregate size of this holder category, even modest shifts in passive fund voting behavior can have a material impact on the election outcome.
Other Actively Managed Institutional Holders. Outside the top five holders profiled above, we estimate that additional actively managed institutional holders (including mutual funds, hedge funds, and separate account managers) hold approximately 20–25% of the Company's outstanding shares. Voting patterns among these holders are heterogeneous: some follow proxy advisor recommendations closely, some conduct fully independent governance analysis, and some defer to portfolio managers who may not prioritize governance voting. Citrine Advisory Group is conducting detailed holder-by-holder analysis of the Company's full institutional shareholder base and will provide supplemental intelligence as engagement efforts progress.
Retail Shareholders. Retail shareholders are estimated to hold approximately 20–22% of the Company's outstanding shares, or approximately 82,520,000 to 90,772,000 shares. Based on historical participation rates in proxy contests at companies of similar size and listing profile, we estimate that only 30–40% of retail-held shares will be voted at the AGM. This depressed participation rate is consistent with well-documented patterns of retail shareholder apathy in proxy contests, particularly where the issues at stake are primarily governance-related rather than transactional.
Among retail holders who do vote, historical data suggests a tendency to favor management. However, retail voters can be influenced by activist public campaign messaging, including paid media, direct mail, and social media campaigns. Corvus Peak's engagement of Falconer Strauss as proxy solicitor suggests that the Activist intends to pursue a vigorous retail outreach campaign, and the effectiveness of that campaign will bear on the ultimate retail voting split.
D. Geographic Distribution Considerations
The geographic distribution of the Company's shareholder base is relevant to the analysis for several reasons, including differences in governance norms, proxy advisory firm influence, and stewardship expectations across jurisdictions.
Based on our analysis of the shareholder register and available beneficial ownership data, we estimate the following geographic distribution:
• United States-based holders: Approximately 65–70% of outstanding shares. US-based holders include Corvus Peak (8.7%), Thorne Capital (6.3%), Windermere Pension Trust (4.4%), the vast majority of passive index fund holdings, and a substantial portion of the retail shareholder base.
• United Kingdom and European-based holders: Approximately 20–25% of outstanding shares. UK-based holders include Ridgeway Asset Management (5.1%) and a significant number of smaller institutional holders that hold shares through the LSE. UK institutional investors are generally subject to the UK Stewardship Code and are expected to exercise voting rights actively and in accordance with published governance principles. This population of holders may be particularly receptive to governance-focused arguments and board refreshment narratives.
• Other international holders: Approximately 5–10% of outstanding shares, including holders based in Asia-Pacific, the Middle East, and other regions. These holders are generally less engaged in governance voting and are more likely to follow proxy advisory firm recommendations or abstain.
The Company's dual listing on both the NYSE and the London Stock Exchange Main Market (premium segment) creates an additional governance lens through which UK-based investors evaluate the Company's board composition and governance practices. UK-based institutional holders may be particularly sensitive to arguments relating to board accountability, independence, and the transparency of executive succession processes, given the expectations established by the UK Corporate Governance Code. This dynamic may favor Corvus Peak's campaign narrative among UK-domiciled holders.
IV. Voting Mechanics and Thresholds
A. Applicable Voting Standard
The election of directors at the 2024 AGM will be governed by the plurality voting standard, as mandated by the Company's Amended and Restated Bylaws (effective March 22, 2022) in the event of a contested election. The Company's bylaws provide that a majority voting standard applies in uncontested elections — requiring each director to receive more FOR votes than WITHHOLD votes in order to be elected — but that the plurality standard is automatically triggered when the number of nominees exceeds the number of board seats to be filled.
In this contest, there are 10 board seats to be filled and 13 candidates nominated (the Company's 10 management nominees plus Corvus Peak's 3 nominees). Under the plurality standard, the 10 candidates receiving the highest number of FOR votes will be elected to the Board. No minimum vote threshold applies; a nominee need only receive more votes than other competing nominees for the same practical "slot" to be elected.
In practical terms, the 7 management nominees who are not targeted by Corvus Peak are expected to receive FOR votes from both the management proxy card and the Corvus Peak proxy card, and their election is not in question. The meaningful contest is therefore between the 3 Corvus Peak nominees (Trask, Loring, and Chu) and the 3 targeted incumbent directors (Kessler, Pemberton, and Delgado-Ríos). For each contested seat, the outcome will be determined by whether the Corvus Peak nominee or the corresponding management nominee receives more FOR votes. Because the plurality standard does not require a candidate to receive majority support — only to receive more votes than a competing candidate — the effective threshold for Corvus Peak to win any given seat is simply to outpoll the targeted incumbent.
It should be noted that the mix-and-match capability available to shareholders adds a layer of complexity to the analysis. Shareholders using the management proxy card may vote FOR all 10 management nominees. Shareholders using the Corvus Peak proxy card may vote FOR the 7 uncontested management nominees plus the 3 Corvus Peak nominees. However, shareholders are not limited to using only one card in its entirety; they may mark their votes for any combination of up to 10 nominees on whichever card they use. This creates the possibility that some shareholders will support one or two Corvus Peak nominees while continuing to support one or two of the targeted incumbents, producing uneven vote totals across the three contested seats.
B. Quorum and Expected Turnout
The Company's Amended and Restated Bylaws require that a quorum be present for the transaction of business at any meeting of shareholders. A quorum consists of the holders of a majority of the outstanding shares entitled to vote, present in person or represented by proxy. Based on the 412,600,000 shares outstanding as of the record date, a quorum requires that at least 206,300,001 shares be represented at the meeting.
We do not anticipate any risk that the meeting will fail to achieve quorum. In the Company's most recent annual general meeting (held June 9, 2023), approximately 78% of outstanding shares were represented by proxy. In the context of a contested election, turnout is typically significantly higher than in an uncontested election, as both sides conduct active proxy solicitation campaigns that increase the rate of proxy submission by institutional and retail holders alike.
Based on the Company's historical AGM turnout data and industry benchmarks for contested elections at large-cap companies, we project that turnout at the 2024 AGM will be in the range of 80–87% of outstanding shares. Our vote projection model uses a base case assumption of 85% turnout, corresponding to approximately 350,710,000 shares voted. This assumption is consistent with contested election turnout data for companies of similar size and dual-listing profile, and represents what we believe to be a reasonable central estimate. We note that actual turnout was later confirmed at 351,280,400 shares (approximately 85.1%).
C. Broker Non-Votes and Uninstructed Shares
Under the rules of the New York Stock Exchange, broker-dealer firms that hold shares on behalf of beneficial owners in "street name" may not exercise discretionary voting authority with respect to contested director elections. This means that shares held in brokerage accounts for which the beneficial owner has not provided voting instructions will not be voted in the election of directors and will be treated as "broker non-votes."
We estimate that broker-held uninstructed shares represent approximately 5–8% of outstanding shares, or approximately 20,630,000 to 33,008,000 shares. These shares will count for quorum purposes (assuming the broker returns a proxy card with respect to other routine matters) but will not be counted in the director election.
The practical impact of broker non-votes is to reduce the effective voting pool for the contested election. If a significant percentage of retail-held shares are held through brokers and remain uninstructed, the total number of shares actually voted in the director election will be lower than the number of shares represented at the meeting. This reduction in the effective voting pool amplifies the relative influence of institutional holders who actively vote their shares, making the voting decisions of the major institutional holders profiled in Section III.B above even more consequential to the election outcome.
V. ISS and Tarrant Partners LLC Preliminary Assessment
A. ISS Likely Position
Cobalt Ridge Solutions is the largest and most influential proxy advisory firm, and its recommendations carry significant weight with institutional investors, particularly passive index funds and smaller actively managed holders. ISS evaluates contested elections under a comprehensive analytical framework that considers four principal factors: (1) the case for change at the company, including board performance, total shareholder return, and strategic oversight; (2) the quality and credentials of the activist nominees; (3) the proportionality of the activist's demands relative to the issues identified; and (4) the company's response to the activist's concerns and its openness to constructive engagement.
Applying this framework to the AGMG contested election, we identify the following vulnerability factors that may predispose ISS to recommend in favor of at least some Corvus Peak nominees:
(i) Stock Underperformance. AGMG's total shareholder return has lagged behind its media and entertainment peer group over both trailing one-year and three-year periods. This underperformance is a significant factor in ISS's "case for change" analysis and is likely to weigh in favor of the activist position. Specifically, AGMG's one-year TSR as of March 1, 2024 was approximately -4.2%, compared to a peer median of +8.7%; three-year TSR was approximately +11.3%, compared to a peer median of +22.6%.
(ii) CEO Succession Controversy. The resignation of Marcus Vane on March 8, 2024, and the Board's immediate designation of Priya Nair-Whitfield as Interim CEO, have become a focal point of the proxy contest. Corvus Peak has characterized this designation as a "predetermined outcome," and ISS is likely to view the CEO succession process as lacking in transparency and independent oversight, particularly given that the Board has not provided detailed public disclosure regarding the circumstances of Mr. Vane's departure.
(iii) Limited Board Refreshment. Prior to the commencement of the Corvus Peak campaign, the Board had not added any new independent directors in the preceding three years. This static composition may be viewed by ISS as indicative of insularity and resistance to refreshment, particularly at a company operating in a rapidly evolving industry.
(iv) Credential Quality of Activist Nominees. The three Corvus Peak nominees have strong professional credentials that are directly relevant to AGMG's business. Malcolm Trask's experience as a former public company CEO in the digital media sector and Dr. Raymond Chu's combination of industry operating experience and academic expertise are likely to be viewed favorably by ISS. However, Vanessa Loring's status as a current Managing Director at Corvus Peak Capital Partners may give ISS pause with respect to her independence, as ISS typically views nominees who are employees or affiliates of the activist proponent with greater scrutiny.
Counterbalancing these vulnerability factors, the Company has several defensive factors that may be favorably viewed by ISS:
(i) Board Responsiveness. The Board has taken concrete actions in response to governance concerns, including the formation of the Special Committee (chaired by Tobias Kessler and including Lucinda Farrow-Grant and Dr. Anwen Llewellyn), the engagement of Calderwood & Harkness LLP as independent governance counsel, and the engagement of Hargrove Tate & Partners to conduct a comprehensive CEO search.
(ii) Rejection of Poison Pill. The Board's public decision on April 10, 2024 to reject the adoption of a shareholder rights plan demonstrates a commitment to shareholder-friendly governance and may be viewed by ISS as evidence that the Board is not seeking to entrench itself.
(iii) Operational Performance of Streaming Segment. Priya Nair-Whitfield's leadership of the Company's Luminos streaming platform has been widely credited with driving the Streaming & Digital Content segment's 42% share of total revenue, and the segment's growth trajectory has been highlighted by equity analysts as a key value driver. ISS may give weight to the argument that management disruption at this critical juncture could undermine the Company's most important strategic asset.
Preliminary Prediction: Based on our analysis of the ISS framework and its application to the specific facts of this contest, we predict that ISS is likely to recommend FOR two of the three Corvus Peak nominees — most likely Malcolm Trask and Dr. Raymond Chu, who are truly independent candidates with strong professional credentials. We believe there is a meaningful probability that ISS will recommend against Vanessa Loring, given her status as a current employee of Corvus Peak, which ISS may view as compromising her independence and creating a conflict of interest. However, we cannot rule out the possibility that ISS may recommend in favor of all three Corvus Peak nominees, particularly if ISS concludes that the Company's governance deficiencies are sufficiently severe to warrant full board reconstitution of the targeted seats. We estimate the probability of ISS recommending all three Corvus nominees at approximately 30–35%.
We expect the ISS recommendation to be published in mid-May 2024, approximately three to four weeks prior to the AGM.
B. Tarrant Partners LLC Likely Position
Adriatic Services Inc. is the second-largest proxy advisory firm and is particularly influential with certain segments of the institutional investor community. Tarrant Partners LLC has historically been somewhat more supportive of activist nominees in governance-focused campaigns compared to ISS, and its analytical framework places significant emphasis on board accountability, transparency of governance processes, and the quality of the company's engagement with shareholders.
In the context of the AGMG contested election, several factors suggest that Tarrant Partners LLC may adopt a more activist-friendly position than ISS:
• The CEO succession process has been criticized by Corvus Peak as opaque and predetermined, and Tarrant Partners LLC is likely to share concerns about the transparency of the process surrounding Marcus Vane's resignation and Nair-Whitfield's designation as Interim CEO.
• Corvus Peak's campaign messaging has been focused primarily on governance and accountability themes — areas where Tarrant Partners LLC has historically been sympathetic to activist arguments.
• Tarrant Partners LLC's published voting guidelines place particular emphasis on the importance of board refreshment and the need for boards to demonstrate ongoing responsiveness to shareholder concerns, both of which are areas where AGMG may be viewed as having fallen short.
Preliminary Prediction: Based on these considerations, we predict that Tarrant Partners LLC is likely to recommend FOR all three Corvus Peak nominees, including Vanessa Loring. While Tarrant Partners LLC typically applies some degree of skepticism to nominees who are affiliated with the activist proponent, it has been more willing than ISS to overlook such affiliations when the overall governance case for change is strong. We estimate the probability of a clean sweep recommendation from Tarrant Partners LLC at approximately 65–75%.
We expect the Tarrant Partners LLC recommendation to be published in late May 2024.
C. Impact of Proxy Advisor Recommendations on Vote Projections
The influence of ISS and Tarrant Partners LLC recommendations on institutional voting behavior has been extensively studied and is well-documented. Based on academic research and our firm's experience in contested elections, we estimate the following:
• ISS influence: Approximately 15–25% of institutional shares are held by investors who follow ISS recommendations directly and without independent analysis. An additional 10–15% of institutional shares are held by investors who use ISS recommendations as a significant factor in their decision-making process, without following ISS mechanically. The total estimated ISS-influenced share pool is therefore approximately 25–40% of institutionally held shares.
• Tarrant Partners LLC influence: Approximately 5–10% of institutional shares are held by investors who follow Tarrant Partners LLC recommendations directly. Tarrant Partners LLC is used as a secondary input by many additional institutions, but its standalone influence is more modest than that of ISS.
• Combined effect: In a scenario where both ISS and Tarrant Partners LLC recommend in favor of all three Corvus Peak nominees, the combined effect could swing approximately 20–35% of institutional shares toward the activist slate, relative to a hypothetical baseline in which no proxy advisor recommendations were issued. This represents a significant share of the expected voted pool and could be determinative of the election outcome.
An important nuance arises in the event that ISS recommends only two of three Corvus Peak nominees (e.g., Trask and Chu, but not Loring). In that scenario, a split dynamic would emerge in which institutional investors following ISS would vote for only two Corvus nominees, while those following Tarrant Partners LLC (if Tarrant Partners LLC recommends all three) would vote for all three. This could produce uneven vote totals across the three contested seats, with Trask and Chu receiving significantly more support than Loring. Our vote projection scenarios in Section VI below model this split dynamic.
VI. Vote Projection Scenarios
A. Methodology
We have modeled three distinct vote projection scenarios to illustrate the range of plausible outcomes at the June 7, 2024 AGM. The three scenarios are:
1. Scenario 1: Base Case (Management-Favorable) — reflects the most optimistic plausible outcome for the Company's management slate, based on assumptions that are favorable to management but not unrealistic.
2. Scenario 2: Middle Case — reflects what we assess to be the most likely outcome based on the balance of available information and probability-weighted assumptions.
3. Scenario 3: Adverse Case (Activist-Favorable) — reflects the most pessimistic plausible outcome for management, based on assumptions that are unfavorable to management but not unrealistic.
The key variables driving the scenarios are:
• ISS and Tarrant Partners LLC recommendation outcomes (whether they recommend 2 or 3 Corvus nominees);
• Windermere Pension Trust's voting decision (management or Corvus);
• The degree of alignment between passive/index fund governance teams and proxy advisor recommendations;
• Ridgeway Asset Management's voting decision;
• Thorne Capital Management's voting decision; and
• Retail shareholder participation rate and management/activist voting split.
All three scenarios assume an 85% turnout rate, corresponding to approximately 350,710,000 shares voted, and apply the plurality voting standard as described in Section IV.A above. The vote projections are expressed as estimated percentages of FOR votes received by each nominee as a proportion of total shares voted, and are presented as ranges to reflect the inherent uncertainty in the underlying assumptions.
B. Scenario 1: Base Case (Management-Favorable)
Key Assumptions:
• ISS recommends FOR 2 of 3 Corvus nominees (Trask and Chu; recommends AGAINST Loring due to Corvus affiliation).
• Tarrant Partners LLC recommends FOR all 3 Corvus nominees.
• Windermere Pension Trust votes FOR the management slate (i.e., votes FOR Kessler, Pemberton, and Delgado-Ríos; WITHHOLDS on Trask, Loring, and Chu).
• Thorne Capital Management follows ISS recommendation (votes FOR Trask and Chu; votes FOR Kessler, Pemberton, and Delgado-Ríos; WITHHOLDS on Loring).
• Ridgeway Asset Management supports all 3 Corvus nominees.
• Passive/index funds split: 60% follow ISS (supporting Trask and Chu only), 40% conduct independent analysis or follow Tarrant Partners LLC (supporting all 3 or mixed).
• Retail holders who vote split approximately 70% management / 30% Corvus.
Projected Results:
Under this scenario, Trask and Chu benefit from the combined support of ISS, Tarrant Partners LLC, Corvus Peak's own shares, Ridgeway, and a majority of passive/index funds. Both are expected to be elected comfortably. Loring's outcome is uncertain because the ISS recommendation against her deprives her of the support of ISS-following institutions, including Thorne Capital and a majority of passive funds; Tarrant Partners LLC support and Ridgeway's support partially offset this, but the result is within the margin of error. Kessler is expected to retain his seat, benefiting from Windermere's support and Thorne Capital's management-aligned vote on his seat. Pemberton is the most vulnerable of the three incumbents and is expected to lose his seat even in the management-favorable scenario, as his support base is insufficient to offset the combined activist and ISS-influenced opposition. Delgado-Ríos falls in a borderline range, with the outcome depending on the precise behavior of passive funds and retail voters.
Net Outcome: Corvus Peak gains 2 seats; management retains 8 of 10 seats (including the vacant seat formerly held by Marcus Vane). However, the Loring and Delgado-Ríos results are within the margin of error, and shifts of 2–3 percentage points in either direction could change the outcome for either seat.
Probability Assessment: We assign a probability of approximately 25–30% to this scenario.
C. Scenario 2: Middle Case
Key Assumptions:
• ISS recommends FOR 2 of 3 Corvus nominees (Trask and Chu; recommends AGAINST Loring).
• Tarrant Partners LLC recommends FOR all 3 Corvus nominees.
• Windermere Pension Trust supports the Corvus slate (votes FOR Trask, Loring, and Chu; WITHHOLDS on Kessler, Pemberton, and Delgado-Ríos).
• Thorne Capital Management follows ISS recommendation (votes FOR Trask and Chu; votes FOR Kessler, Pemberton, and Delgado-Ríos; WITHHOLDS on Loring).
• Ridgeway Asset Management supports all 3 Corvus nominees.
• Passive/index funds lean toward proxy advisors: 65% follow ISS/Tarrant Partners LLC recommendations, with a modest tilt toward Tarrant Partners LLC among passive funds that consider both.
• Retail turnout moderate; among retail voters, split approximately 65% management / 35% Corvus.
Projected Results:
The critical difference between Scenario 1 and Scenario 2 is the voting decision of Windermere Pension Trust. When Windermere's 18,154,400 shares swing from management to the Corvus slate, the vote totals for the three Corvus nominees increase by approximately 5 percentage points, while the vote totals for the three targeted incumbents decrease by a corresponding amount. This shift is sufficient to push Loring over the election threshold and to push all three incumbents below it.
Under this scenario, all three Corvus Peak nominees are elected, with Trask and Chu winning by comfortable margins and Loring winning by a more modest but still clear margin. All three targeted incumbents lose their seats, with Pemberton suffering the largest margin of defeat.
Net Outcome: Corvus Peak gains all 3 targeted seats. The board is reconstituted with Trask, Loring, and Chu replacing Kessler, Pemberton, and Delgado-Ríos. The reconstituted board would consist of 7 continuing management-aligned directors, 3 Corvus Peak nominees, and one vacant seat (formerly held by Marcus Vane).
Probability Assessment: We assign a probability of approximately 45–50% to this scenario. This is our assessed most-likely outcome.
D. Scenario 3: Adverse Case (Activist-Favorable)
Key Assumptions:
• ISS recommends FOR all 3 Corvus nominees (including Loring, despite Corvus affiliation).
• Tarrant Partners LLC recommends FOR all 3 Corvus nominees.
• Windermere Pension Trust publicly endorses the Corvus slate, triggering a cascade effect among other institutional holders.
• Thorne Capital Management follows ISS recommendation (votes FOR all 3 Corvus nominees; WITHHOLDS on Kessler, Pemberton, and Delgado-Ríos).
• Ridgeway Asset Management supports all 3 Corvus nominees.
• Passive/index funds strongly follow proxy advisors: 75% or more align with ISS/Tarrant Partners LLC in favor of all 3 Corvus nominees.
• Retail participation depressed (lower end of 30–35% vote rate); among retail voters who do participate, split approximately 60% management / 40% Corvus.
Projected Results:
Under this scenario, the convergence of a full ISS/Tarrant Partners LLC recommendation sweep, Windermere's public endorsement, and strong passive fund alignment produces a commanding victory for the Corvus Peak slate. All three Corvus nominees are elected with substantial margins, and all three targeted incumbents lose their seats decisively. The magnitude of the margins would constitute a strong mandate for the reconstituted board to redirect the Company's strategy and governance practices.
Net Outcome: Corvus Peak gains all 3 seats with commanding margins. The reconstituted board would face significant pressure to accede to Corvus Peak's strategic priorities, including potentially accelerating or redirecting the CEO search process.
Probability Assessment: We assign a probability of approximately 20–25% to this scenario.
E. Sensitivity Analysis — Windermere as Swing Voter