Saba Capital Comments on Shareholders’ Clear Mandate for Change at Neuberger Berman-Managed Closed-End Funds’ 2024 Joint Annual Meeting
Saba Capital Management, L.P., the largest shareholder of Neuberger Berman Municipal Fund (NBH) and Neuberger Berman Next Generation Connectivity Fund (NBXG), has criticized the 2024 Joint Annual Meeting election process. Despite shareholders overwhelmingly voting for Saba's director candidate, Paul Kazarian, Neuberger Berman's majority vote standard prevented his appointment. At NBXG, Kazarian received more than twice the votes of incumbent directors, even without Saba's votes.
Saba argues that Neuberger Berman's impossible-to-achieve vote standard allows underperforming directors to retain their positions indefinitely. The company is fighting against proposals by fund managers to eliminate shareholders' right to annual elections. Saba emphasizes the importance of protecting shareholder rights and ensuring their voices are heard in closed-end fund governance.
Saba Capital Management, L.P., il maggiore azionista del Neuberger Berman Municipal Fund (NBH) e del Neuberger Berman Next Generation Connectivity Fund (NBXG), ha criticato il processo elettorale della 2024 Joint Annual Meeting. Nonostante gli azionisti abbiano votato in modo schiacciante a favore del candidato direttore di Saba, Paul Kazarian, lo standard di voto maggioritario di Neuberger Berman ha impedito la sua nomina. Nel fondo NBXG, Kazarian ha ricevuto più del doppio dei voti dei direttori uscenti, anche senza i voti di Saba.
Saba sostiene che lo standard di voto impossibile da raggiungere di Neuberger Berman consente ai direttori poco performanti di mantenere le loro posizioni indefinitamente. L'azienda sta combattendo contro le proposte dei gestori di fondi per eliminare il diritto degli azionisti a elezioni annuali. Saba sottolinea l'importanza di proteggere i diritti degli azionisti e di garantire che le loro voci siano ascoltate nella governance dei fondi chiusi.
Saba Capital Management, L.P., el mayor accionista del Neuberger Berman Municipal Fund (NBH) y del Neuberger Berman Next Generation Connectivity Fund (NBXG), ha criticado el proceso electoral de la 2024 Joint Annual Meeting. A pesar de que los accionistas votaron abrumadoramente a favor del candidato a director de Saba, Paul Kazarian, el estándar de voto mayoritario de Neuberger Berman impidió su nombramiento. En NBXG, Kazarian recibió más del doble de los votos de los directores incumbentes, incluso sin los votos de Saba.
Saba argumenta que el estándar de voto imposible de alcanzar de Neuberger Berman permite a los directores de bajo rendimiento retener sus posiciones indefinidamente. La compañía está luchando contra las propuestas de los gestores de fondos para eliminar el derecho de los accionistas a elecciones anuales. Saba enfatiza la importancia de proteger los derechos de los accionistas y asegurar que sus voces sean escuchadas en la gobernanza de fondos cerrados.
Saba Capital Management, L.P., Neuberger Berman Municipal Fund (NBH) 및 Neuberger Berman Next Generation Connectivity Fund (NBXG)의 최대 주주인 Saba는 2024 연례 공동 회의의 선거 과정을 비판했습니다. 주주들이 Saba의 이사 후보인 Paul Kazarian을 압도적으로 지지했음에도 불구하고, Neuberger Berman의 다수 투표 기준이 그의 임명을 방해했습니다. NBXG에서 Kazarian은 Saba의 투표 없이도 재직 중인 이사들보다 두 배 이상의 투표를 받았습니다.
Saba는 Neuberger Berman의 달성할 수 없는 투표 기준이 성과가 저조한 이사들이 무기한으로 자리유지를 허용한다고 주장합니다. 회사는 펀드 매니저들이 주주들의 연례 선거 권리를 없애려는 제안과 싸우고 있습니다. Saba는 주주 권리를 보호하고 폐쇄형 펀드 거버넌스에서 그들의 목소리가 들리도록 하는 것이 중요하다고 강조합니다.
Saba Capital Management, L.P., le plus grand actionnaire du Neuberger Berman Municipal Fund (NBH) et du Neuberger Berman Next Generation Connectivity Fund (NBXG), a critiqué le processus électoral de la 2024 Joint Annual Meeting. Malgré le fait que les actionnaires aient voté massivement en faveur du candidat directeur de Saba, Paul Kazarian, le standard de vote majoritaire de Neuberger Berman a empêché sa nomination. Au NBXG, Kazarian a reçu plus de deux fois les voix des administrateurs en fonction, même sans les votes de Saba.
Saba soutient que le standard de vote impossible à atteindre de Neuberger Berman permet aux administrateurs peu performants de conserver leurs postes indéfiniment. L'entreprise lutte contre les propositions des gestionnaires de fonds visant à supprimer le droit des actionnaires à des élections annuelles. Saba souligne l'importance de protéger les droits des actionnaires et de s'assurer que leurs voix soient entendues dans la gouvernance des fonds fermés.
Saba Capital Management, L.P., der größte Aktionär des Neuberger Berman Municipal Fund (NBH) und des Neuberger Berman Next Generation Connectivity Fund (NBXG), hat den Wahlprozess der 2024 Joint Annual Meeting kritisiert. Trotz der überwältigenden Stimmen der Aktionäre für den Direktorenkandidaten von Saba, Paul Kazarian, verhinderte der Mehrheitsabstimmungsstandard von Neuberger Berman dessen Ernennung. Im NBXG erhielt Kazarian mehr als doppelt so viele Stimmen wie die amtierenden Direktoren, selbst ohne die Stimmen von Saba.
Saba argumentiert, dass der unerreichbare Abstimmungsstandard von Neuberger Berman es unterdurchschnittlichen Direktoren erlaubt, ihre Positionen unbegrenzt zu behalten. Das Unternehmen kämpft gegen Vorschläge von Fondsmanagern, die das Recht der Aktionäre auf jährliche Wahlen abschaffen wollen. Saba betont die Bedeutung des Schutzes der Rechte der Aktionäre und der Gewährleistung, dass ihre Stimmen in der Governance geschlossener Fonds Gehör finden.
- Saba's nominee Paul Kazarian received significantly more votes than incumbent directors at both NBH and NBXG
- Strong shareholder support for change in fund governance
- Saba is actively fighting to protect shareholder rights in closed-end funds
- Neuberger Berman's majority vote standard prevented the election of Saba's nominee despite winning the popular vote
- Incumbent directors retain their seats despite losing the election by a wide margin
- Potential limitation of shareholder rights through proposed changes to annual election rules
Insights
This election outcome highlights significant issues in closed-end fund governance. The disparity between shareholder votes and actual board composition raises serious questions about the effectiveness of current voting standards. Neuberger Berman's majority vote requirement appears to be functioning as an entrenchment mechanism, allowing incumbent directors to retain their positions despite clear shareholder dissatisfaction.
The preliminary results, especially at NBXG where the Saba nominee received over
The overwhelming support for Saba's nominee suggests deep-seated investor dissatisfaction with the current management of NBH and NBXG. This discontent likely stems from the funds' underperformance and persistent discounts to NAV. The inability to effect board changes despite clear shareholder preference could lead to continued underperformance and investor frustration.
This situation may prompt increased activist investor activity in the closed-end fund space, potentially leading to more proxy contests and pressure on fund managers to improve performance or consider strategic alternatives. Investors should closely monitor these developments, as they could impact fund valuations and potentially create opportunities for arbitrage or value realization through activist-driven changes.
The voting outcome raises significant legal and regulatory concerns. While Neuberger Berman's voting standard may be technically compliant with current regulations, it appears to conflict with principles of shareholder democracy and good corporate governance. This situation could prompt regulatory scrutiny and potential reforms in closed-end fund governance rules.
Saba's ongoing legal challenge to protect shareholder rights is noteworthy. If successful, it could set important precedents for shareholder rights in closed-end funds. The potential NYSE and CBOE proposals to eliminate annual elections may face legal challenges, as they could be seen as further eroding shareholder rights. This evolving legal landscape could have far-reaching implications for the closed-end fund industry and investor protections.
Shareholders Voted to Elect Saba Nominee Paul Kazarian at Both Neuberger Berman Funds by a Wide Margin – But Neuberger Berman Rigged the Election to Enable Its Incumbent Directors to Hold onto Their Seats
Mr. Kazarian Received More Than 2x as Many Votes as the Incumbent Directors at NBXG Received, Even Without Counting Saba’s Votes
Neuberger Berman’s Impossible-to-Achieve Majority Vote Standard Shines Light on Closed-End Fund Managers Silencing Shareholders’ Voices, Which Saba is Currently Fighting in Court
Based on the preliminary results of the Annual Meeting, shareholders overwhelmingly voted to elect Saba’s director candidate, Paul Kazarian, to the Funds’ Boards of Directors (the “Boards”). However, due to Neuberger Berman’s majority vote standard, Mr. Kazarian will not be granted his seat and Neuberger Berman’s incumbent directors will hold onto their seats despite failing to receive a majority of the votes cast.
Boaz Weinstein, Founder and Chief Investment Officer of Saba, commented:
“Despite the clear mandate for change from NBH and NBXG shareholders, Neuberger Berman’s impossible-to-achieve vote standard allows its directors to hold onto their seats in perpetuity – even when they lose an election. Directors who are responsible for deplorable shareholder returns and excessive discounts to NAV should not be permitted to continue serving on the board of any closed-end fund, especially when shareholders resoundingly reject them as they have at these two funds. Shame on Neuberger Berman for running a rigged election that allows incumbent directors who lose by a huge landslide to keep their seats.
After Neuberger Berman and the Investment Company Institute recently claimed that we are ‘drowning out the voice of retail investors’ and exerting ‘an outsized influence over the proxy machinery’ with our votes, this year’s Annual Meeting outcome clearly disproves both falsehoods.1 If you look at the preliminary results from NBXG, even without the approximately 4.8 million shares Saba voted, our director candidate Paul Kazarian won by a landslide – receiving more than 2x as many votes as the incumbents. Clearly, entrenched managers like Neuberger Berman are the ones preventing retail investors’ voices from being heard.
This rigged election has occurred at a time when closed-end fund shareholder rights are under attack on several fronts. Right now, managers such as Neuberger Berman and their lobbyists are attempting to push through proposals at the NYSE and CBOE to eliminate closed-end fund shareholders’ right to annual elections. Saba and countless other investors, governance experts and independent academics find it appalling that these bad actors are attempting to eliminate one of shareholders’ most fundamental rights just so that their hand-picked directors can serve unchecked for life, without any recourse for ordinary investors.
It is imperative that shareholders’ voices are heard and acknowledged – not silenced. This is why Saba continues to do everything in its power to protect the rights of closed-end fund shareholders.”
Preliminary Voting Results of NBH and NBXG’s Joint 2024 Annual Meeting of Shareholders |
|||
Neuberger Berman Municipal Fund (NYSE: NBH) |
|||
|
For |
Against |
Abstain |
Saba Nominee Paul Kazarian |
8,137,112 |
72,166 |
8,671 |
Incumbent Director Martha Goss |
6,791,017 |
0 |
460,900 |
Incumbent Director Marc Gary |
6,789,782 |
0 |
462,135 |
Neuberger Berman Next Generation Connectivity Fund (NYSE: NBXG) |
|||
|
For |
Against |
Abstain |
Saba Nominee Paul Kazarian |
21,731,958 |
329,700 |
40,475 |
Incumbent Director Michael Knetter |
8,082,708 |
0 |
4,676,610 |
Incumbent Director Marc Gary |
8,062,838 |
0 |
4,696,477 |
Incumbent Director Martha Goss |
8,031,841 |
0 |
4,727,476 |
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1 Comment letters submitted to the
About Saba Capital
Saba Capital Management, L.P. is a global alternative asset management firm that seeks to deliver superior risk-adjusted returns for a diverse group of clients. Founded in 2009 by Boaz Weinstein, Saba is a pioneer of credit relative value strategies and capital structure arbitrage. Saba is headquartered in
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Source: Saba Capital Management, L.P.
FAQ
What was the outcome of the 2024 Joint Annual Meeting for Neuberger Berman funds NBH and NBXG?
How many votes did Paul Kazarian receive compared to incumbent directors at NBXG?
What is Saba Capital's main criticism of Neuberger Berman's election process?
What broader issue in closed-end fund governance is Saba Capital addressing?
