Dead Hand Proxy
An anti-takeover strategy where only the original board of directors (not new board members) can revoke certain defensive measures, making it harder for a hostile bidder to gain control.
Implications
A defense mechanism used by a company's board during a hostile takeover attempt, where only the original board members can implement changes to the company's defensive measures, even if new directors are elected by the acquirer.
Example
Example: A corporation employs a dead hand proxy to prevent an acquiring company from dismantling its poison pill defense, ensuring that only the incumbent board members have control over such decisions.
Related Terms
Different from a poison pill, which dilutes shares to prevent takeovers, a dead hand proxy specifically restricts who can alter defensive measures during a takeover attempt.
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