- HBO's hit show "Succession" airs its series finale Sunday night, with Waystar Royco's future in the balance.
- The show is beloved for its attention to detail, from star performances to filming techniques to wardrobe.
On HBO's hit show "Succession," the beats of a proxy fight are sometimes just as intense as a scheming betrayal from a once loyal lackey.
Over four seasons, the show has laid out a thesis about the all-encompassing gravitational force of Logan Roy, the media mogul behind the fictional news and entertainment conglomerate Waystar Royco. We've seen Roy fend off corporate raiders, court strategic acquisitions, and best his children's efforts to eject him from his company even as they desperately vied for his approval.
The show nailed the tension and stakes around the fight for control of a large public company, but sometimes played it a little loose with the norms of corporate governance, legal experts said.
A representative for HBO said no one from the show was available to comment ahead of publication.
Here are four things the show gets wrong, according to experts:
The board of a public company would assert more power over a figure like Logan Roy
In Season 1, when Logan's son Kendall Roy orchestrates an ill-fated "vote of no confidence" against his father, the board is shown more or less cowering in Logan's presence. Perhaps with good reason — Logan swiftly declares his son's defeat, and proceeds to expel members who voted against him.
A vote of "no confidence" isn't really something you'd see in a corporate boardroom, said Kai Liekefett, a partner at Sidley Austin, and an expert on corporate governance issues.
"That's a term of art that's used in politics, more than in the corporate world," he said.
The idea that Logan could simply fire board directors who opposed him also doesn't ring true, he added.
"The CEO does not get to fire the board, it's the other way around," Liekefett said.
Legal experts generally agreed that Waystar's board was portrayed as more deferential to a CEO of a major company than is realistic.
"Part of this is about the internal dramatic dynamics of the show — the kind of tyrant that he is in his family, that we then see reproduced in the business setting," said Diane Kemker, who is a visiting professor of law at the Southern University Law Center, as well as the DePaul University College of Law.
"But the failure of the board to engage in any succession planning at all, is a first thing to note," she said.
Kemker is also one of the organizers of a law professors' seminar that has a mock syllabus on legal issues on "Succession," she said.
That shareholder meeting in Season 3 would have been pretty anticlimactic in real life (and Shiv couldn't have just finagled herself a board seat)
Shareholder meetings tend to be brief, perfunctory affairs with hardly any surprises, corporate law experts said. And vote tallies typically start coming in weeks before the meeting.
But in Season 3, the shareholders meeting is the anchor of an episode featuring a nail-biter of a proxy battle between the Roys and a faction helmed by Stewy Hosseini, everyone's favorite turtleneck-wearing private equity investor.
Settlement talks between the camps unfold as Waystar's COO Frank Vernon feebly attempts to stall. But high-stakes settlement negotiations pretty much never happen during such a vote, lawyers said.
And then, the drama eventually resolves with Logan's daughter, Shiv Roy, cutting a deal that would secure her a board seat. This, too, is a bit of a stretch because deals being made need to get board approval, and be nailed down with documentation, experts said.
"In practice, a mere last-minute handshake deal would probably not happen, and would not be enough to resolve the proxy contest," said Rebecca Van Derlaske, an attorney at Olshan Frome Wolosky LLP, who represents activist investors.
Where are the lawyers and the investment bankers?
When Kendall and brother Roman Roy set out to spike a deal with the eccentric tech founder Lukas Matsson in Season 4, the three men get into a head game in Norway, throwing out numbers for Waystar's price tag. They toss about $144 a share, $187 per share, and by the end of the episode, Matsson seemingly ends the conversation with an offer for $192 a share.
But these days, deals and bids don't simply end with negotiations by a handful of top executives strolling around scenic fjords. The board, lawyers, and bankers are intimately involved in decisions around pricing, soliciting competing offers, and preparing detailed documentation around bid proposals, said Anat Alon-Beck, a law professor at Case Western Reserve University, who specializes in corporate law.
"The issue is not just throwing out numbers, but it's the fact that that's not where it usually ends," said Alon-Beck. "There has to be a process to it."
Today, a board doesn't just accept numbers that the executives hand them – they have to consult experts. The company's chief financial officer will crunch the numbers, and its investment banker will do the same and try to get competing bids, she said.
"You need to have both internal and external evaluations of the offer," said Alon-Beck. "There are gatekeepers in these deals, and on the show, those gatekeepers were missing."
"Maybe we'll see them later, but for now we haven't seen them," said Alon-Beck.
Logan was good, but not that good
At the end of Season 3, when three Roy siblings — Kendall, Shiv, and Roman — join forces to try to stop Logan from selling Waystar without their approval, they declare that their father needs a supermajority of shareholder votes to effect a change of control of ownership in Waystar stock.
The Roy children brandish the idea, believing that they have enough voting power among them to block the deal. But when they arrive at Logan's, they find that he's outwitted them apparently by reopening his divorce settlement that led to the bylaws around voting.
It's not so easy to change such bylaws, as that itself would typically also require a supermajority vote, said Christopher Barlow, a partner at Skadden Arps Slate Meagher & Flom who advises on mergers and acquisitions.
"In the show, we saw Logan undermine his children's plan by reopening the divorce settlement," Barlow said. "The corporate law reality would have seen Logan trying to get a sufficient number of votes to change the supermajority standard that the children were trying to use to block the transaction."