# kaal:claim:5583610-005

**Claim.** Negotiated settlements that hand activists board seats risk entrenching incumbents, whereas LER's consumptive utilities are designed to produce consensus and alignment without ceding board representation.

**Type.** failure  **Support.** argued

**Holds when.**

- settlement-based responses to activist campaigns

**Source quote.**

> Unlike negotiated settlements that, in granting activists board seats, risk incumbent entrenchment,15 LERs incentivize consensus and alignment through LER's consumptive utilities, thus, reducing conflict while enhancing shareholder engagement.

**From.** Wulf A. Kaal, *Liquid Equity Rewards in Corporate America* (2025), 1. Introduction, page 5

**Cite as.** Wulf A. Kaal, Liquid Equity Rewards in Corporate America (2025). SSRN: https://ssrn.com/abstract=5583610

**Verify.** sha256 of source PDF `2d73609d95ddb1573acc2a9e7af617fbe6283d6e591deb6317f6d5d804517c62` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202025%20-%20Liquid%20Equity%20Rewards%20in%20Corporate%20America.pdf

**Failure mode.** settlement entrenchment  (family: agency-cost-and-managerial-opportunism)

**Topics.** corporate-governance

**Keywords.** activist-settlements, board-seats, entrenchment, shareholder-engagement

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