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CHARLOTTE, NC – Brighthouse Financial , Inc. (NASDAQ:BHF), a major player in the life insurance industry with a market capitalization of $3.56 billion, has amended its bylaws, as disclosed in a recent 8-K filing with the Securities and Exchange Commission. The company, which InvestingPro analysis suggests is currently undervalued, has seen its stock surge over 30% in the past six months. The changes, effective January 29, 2025, were adopted by the company’s Board of Directors to enhance the governance framework of the organization.
The amendments to the bylaws address several aspects of the company’s operations, including the process for stockholder nominations of directors and the submission of proposals for consideration at stockholder meetings. These governance changes come as InvestingPro data shows management has been actively buying back shares, demonstrating confidence in the company’s direction. Notably, the bylaws now feature revised disclosure requirements for stockholder nominations, demanding more detailed information about nominees for director positions, the stockholders making the nominations, and any beneficial owners on whose behalf nominations or proposals are made.
In an effort to ensure that nominees are qualified to serve, the company may now request additional information to assess a nominee’s eligibility. Moreover, the bylaws clarify that if a stockholder or their representative fails to appear at a meeting to present a nomination or proposal, despite the proposal being included in the meeting notice, such nomination or proposal will not be considered.
The bylaws also outline that nominations for additional directorships created after a certain deadline can be made under specific conditions, and they establish that proxy cards used by stockholders for solicitation must not be white, a color reserved exclusively for the Board’s use.
Furthermore, the bylaws stipulate that stockholders must update and supplement their nominations or proposals to ensure accuracy both on the record date and 15 days prior to the meeting or any postponement thereof. This requirement underscores the company’s commitment to transparency and proper governance practices. With its next earnings report due in 7 days and analysts expecting profitability this year, investors seeking deeper insights can access comprehensive analysis through InvestingPro’s detailed research reports, which cover this and 1,400+ other US stocks.
The revised bylaws also include definitions for terms such as "affiliates," "associates," "business day," and "close of business," contributing to a clearer understanding of the governance processes.
These changes to the bylaws are part of Brighthouse Financial’s ongoing efforts to maintain robust corporate governance standards. The full text of the amended bylaws is attached as Exhibit 3.1 to the 8-K filing, which serves as the source of this information.
In other recent news, Brighthouse Financial has been the focus of several analyst upgrades and downgrades, following reports of a potential sale. Jefferies analyst Suneet Kamath adjusted the rating for Brighthouse Financial from Buy to Hold, setting a price target of $64.00, expressing skepticism about the potential for a partial sale. In contrast, Barclays (LON:BARC) analysts upgraded Brighthouse Financial’s stock rating from Equal Weight to Overweight, significantly raising the price target from $52.00 to $85.00, citing potential upside even if a sale does not materialize. Morgan Stanley (NYSE:MS) also upgraded the stock from Equalweight to Overweight, with a new price target of $76.00, anticipating an earnings per share (EPS) upside resulting from the company’s preparatory actions related to a late fee rule.
These recent developments follow reports that Brighthouse Financial is exploring a sale, with Goldman Sachs and Wells Fargo (NYSE:WFC) evaluating potential offers. The company, known for its variable annuities products, is considering bids for the entire company or raising minority equity. Investors are closely watching for any signs of a concrete offer or interest from potential buyers.
In its Third Quarter 2024 earnings call, Brighthouse Financial reported a decline in adjusted earnings compared to the previous quarter, but highlighted its strong capital position, ongoing stock repurchases, and sales growth in annuity and life insurance products. The company aims to restore its Risk-Based Capital (RBC) ratio to 400%-450%, with the current estimate between 365%-385%. Year-to-date annuity sales reached $7.8 billion, a 15% increase in Shield Annuity products, and life insurance sales grew by 19% to $87 million. The company remains optimistic about its financial standing and the ongoing simplification of its hedging strategy.
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