American corporations seeking to guard against unfriendly bids are lobbying vigorously to win shareholder acceptance for a variety of antitakeover measures, according to a survey by the Investor Responsibility Research Center (IRRC) of Washington.
The lobbying efforts vary "from low-key inquiries urging investors to support management proposals to more-heavy-handed threats involving possible retaliation against institutions that failed to support management initiatives," the IRRC report said.
IRRC said it found that, "Whether in response to these threats or out of a general uneasiness about offending current or potential clients, a number of banks and insurance companies changed their policies from opposition in the past to support for antitakeover measures" adopted by those clients.
The IRRC did not identify individuals or firms who had changed their position on antitakeover measures. James E. Heard, deputy director of IRRC, said their information was obtained on a confidential basis.
"The fact is that a number of institutional investors are making decisions based on their wish to preserve their own financial best interests. If that is the basis for what they are doing, it is a pretty disturbing trend," Heard said.
IRRC calls itself an independent nonprofit research organization. Its clients include more than 200 institutional investors, including banks, insurance companies, investment management firms and public pension funds.
Corporate lobbying for antitakeover proposals was not totally successful, the IRRC noted. Some investment managers maintained their opposition to antitakeover plans and drew support from managers of public pension funds.
"Opposition to these measures seems to have intensified among major public pension funds, which are largely immune from the sorts of pressures that can be brought to bear on investment managers," the IRRC report said.
Part of this opposition can be tied to the recent formation of the Council of Institutional Investors to give pension funds a greater voice in corporate governance, the IRRC said. The council now includes more than two dozen pension funds with assets exceeding $100 million each.
More than 250 corporations have submitted a record number of anti-takeover measures to stockholders during the first nine months of this year, compared with 200 corporations during the same time period in 1984 and fewer than 100 corporations in 1983. The IRRC said that only 19 of the 450 proposals that have been voted on this year have been defeated.
The IRRC results are based on a survey of 120 institutional investors.
The group said that many companies are adopting multiple defenses against possible takeovers. The most popular "shark repellants," have been measures that would limit shareholder participation in corporate governance, fair-price proposals that require all stockholders to be treated equally in an offer to buy stock, requirements that stagger the election of directors to a company's board and blank-check preferred-stock authorizations that allow for a variety of defenses against hostile takeovers, the IRRC said.
Among the 250 companies adopting anti-takeover measures this year are Atlantic Richfield Co., Eastern Air Lines Inc., Eli Lilly & Co., J. C. Penney Co. Inc., Mobil Corp., Upjohn Co. and Westinghouse Electric Corp.
The report said, "Their actions suggest that very few corporations, even the biggest, now consider themselves immune to hostile takeovers."