On September 23, 2020, the Securities and Exchange Commission adopted the amendments to its shareholder proposal rule, which governs the process for a shareholder to have a proposal included in the company’s proxy statement for consideration by all shareholders. Typical shareholder proposals include recommendations that a company or its board of directors take specified actions. The amendments are designed to promote engagement between the company and the proponent, raise eligibility thresholds for shorter-term investors and further restrict repeat proposals garnering minimal support.
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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.
Continue reading Shareholder Pressure Increases for Disclosure of Lobbying Activities and Other Political Expenditures
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.
Continue reading NYSE Further Narrows Broker Discretionary Voting: Potential Impact on a Company’s Proxy Season Planning
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.
Continue reading Executive Compensation: Negative Say-on-Pay Vote Does Not Trump Board Authority