Investors and shareholder activists have become increasingly focused on the oversight and disclosure of political expenditures by public companies since the Supreme Court’s 2010 decision in Citizens United v. Federal Election Commission, which invalidated restrictions on certain corporate political spending. Because the 2012 presidential election is expected to be a hotly contested race funded by record levels of political spending, the public’s interest in political and lobbying expenditures by public companies is intensifying and merits a careful review of recent trends in the policies and disclosure practices of public companies with respect to their political spending.
The New York Stock Exchange (NYSE) once again has limited the ability of a broker to vote on proposals at shareholder meetings for which the broker has not received voting instructions from its customers. This narrowing follows recent rule amendments triggered by the Dodd-Frank Act prohibiting brokers from voting uninstructed shares in the election of directors and on proposals relating to executive compensation.
In an important battle in the ongoing executive compensation wars, last week a federal court in Oregon affirmed that directors of Oregon corporations are indeed protected by the business judgment rule in making executive compensation decisions. In ruling that the claim in Plumbers Local No. 137 Pension Fund v. Davis should be dismissed, the specifically declined to follow a recent controversial decision by an Ohio court allowing a say-on-pay lawsuit to proceed under similar circumstances.