Shareholders ask our board to take the steps necessary to amend the appropriate company governing documents to give the owners of a combined 10% of our outstanding common stock the power to call a special shareholder meeting.
To make up for our complete lack of a right to act by written consent we need the right of 10% of shares to call for a special shareholder meeting. Hundreds of major companies provide shareholders with the right to act by written consent.
Certain companies, that do not provide for a shareholder right to act by written consent, have a more reasonable stock ownership threshold to call for a special shareholder meeting. Southwest Airlines is an example of a company that does not provide for shareholder written consent and yet provides for 10% of shares to call for a special shareholder meeting.
Calling a special shareholder meeting is hardly ever used by shareholders but the main point of the right to call a special shareholder meeting is that it gives shareholders a Plan B option if management is not interested in good faith shareholder engagement
This proposal received 38% support at an earlier NiSource annual meeting. Perhaps it will do better now because the shareholder right to call for a special shareholder meeting can play a role in turning around a company. NiSource is in need of a turnaround. NiSource stock was at $364 in 2019 and has not been close to the $364 level since then with a price of $157 in late 2024.
A special meeting can be called to introduce a company to a new strategy. The current 25% ownership threshold (based on all shares outstanding) to call for a special shareholder makes it difficult for shareholders or potential shareholders to acquire shares to meet the 25% threshold. The best strategies for turning around a company do not necessarily come from a company's existing shareholders. Making it less difficult for shareholders to acquire enough shares to call a special shareholder meeting may be an incentive for the NiSource directors and executives to develop a turnaround strategy on their own.
With the widespread use of online shareholder meetings it is much easier for NiSource to conduct a special shareholder meeting and our bylaws thus need to be updated accordingly.