Your SlideShare is downloading. ×
(ALERT) The SEC Weighs in on Proxy Access Proposals
(ALERT) The SEC Weighs in on Proxy Access Proposals
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

(ALERT) The SEC Weighs in on Proxy Access Proposals

28

Published on

This week the SEC rendered decisions on whether or not 10 proxy access proposals submitted by various shareholders could be excluded from ballots. The biggest losers were retail investors affiliated …

This week the SEC rendered decisions on whether or not 10 proxy access proposals submitted by various shareholders could be excluded from ballots. The biggest losers were retail investors affiliated with the U.S. Proxy Exchange (USPX), who saw six of their non-binding resolutions ejected for two types of deficiencies. Proponent victors included Norges Bank Investment Management (NBIM) and Daniel Rudewicz’s Furlong Fund, whose proposals will move forward to a vote.

Published in: Investor Relations
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
28
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
1
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. 200 Broadacres Drive, 3rd Floor Bloomfield, NJ 07003 P: 973.873.7700 F: 973.338.1430 www.allianceadvisorsllc.com The Shareholder Communication Strategists ALERT: The SEC Weighs in on Proxy Access Proposals This week the SEC rendered decisions on whether or not 10 proxy access proposals submitted by various shareholders could be excluded from ballots. The biggest losers were retail investors affiliated with the U.S. Proxy Exchange (USPX), who saw six of their non-binding resolutions ejected for two types of deficiencies. Proponent victors included Norges Bank Investment Management (NBIM) and Daniel Rudewicz’s Furlong Fund, whose proposals will move forward to a vote. In the case of the USPX resolution, the SEC concurred with Chiquita Brands, MEMC Electronic Materials, Textron and Sprint Nextel that the proposal was vague and indefinite because it did not adequately explain one of the eligibility requirements for nominating directors, namely SEC Rule 14a-8(b). The resolution stipulated that holders of 1% of the shares for two years and/or 100 holders who met 14a-8(b) eligibility requirements could nominate up to 12% of the board. The SEC concluded that, as framed, neither the companies nor their shareholders would be able to determine with any reasonable certainty what actions or measures the proposal required. The SEC also sided with Bank of America and Goldman Sachs that the USPX resolution was excludable because it constituted multiple proposals dealing with both proxy access and a change in control. Specifically, one section of the proposal dictated that it would not be considered a change in control if a majority of board seats were filled by individuals nominated by the board or by a nominating shareholder. As a result of these rulings, only two USPX proposals will appear on a spring annual meeting ballot–at Ferro and Princeton National Bancorp, which did not seek to omit the resolution. Companies with later-year meetings, such as Dell, should have no difficulties excluding the proposal since they now have precedents to follow. The proponents, for their part, are already contemplating how best to revise their proxy access template for the 2013 proxy season. Separately, the SEC denied Charles Schwab, Wells Fargo and Western Union no-action relief from NBIM’s bylaw resolution, which would permit a holder of 1% of the shares for one year to nominate up to 25% of the board. The companies had argued that the proposal was false and misleading because it referenced a non-operational website link. The proponent, however, corrected the deficiency to the SEC’s satisfaction. NBIM’s other targets include CME Group, which did not challenge the proposal, and Staples, which is seeking omission of the proposal from its June annual meeting ballot. KSW took the riskier approach of adopting its own proxy access bylaw in the hopes of omitting a more lenient binding resolution from the Furlong Fund. Unfortunately, the tactic failed. The SEC ruled that the company’s eligibility requirement for shareholder nominations (5% of the shares for one year) was too divergent from the proponent’s (2% of the shares for one year) to consider the shareholder resolution to be substantially implemented. Because KSW shareholders will be choosing between two versions of proxy access, their vote will provide issuers with the first clear guidance of what level of ownership is preferred by investors and proxy advisors for adopting a proxy access regime.
  • 2. The Shareholder Communication Strategists Copyright © 2012 by Alliance Advisors, LLC. ALL RIGHTS RESERVED. Status of Proxy Access Proposals Company Proponent SEC Decision Annual Meeting Bank of America USPX Omitted Charles Schwab NBIM Allowed May Chiquita Brands UPSX Omitted CME Group NBIM - June Dell USPX - July Goldman Sachs Group USPX Omitted Hewlett-Packard Amalgamated Bank Withdrawn Ferro USPX - April KSW Furlong Fund Allowed May MEMC Electronic Materials USPX Omitted Microwave Filter Furlong Fund - March Nabors Industries Coalition of public pension funds - June Pioneer Natural Resources NBIM Withdrawn Princeton National Bancorp USPX - May Sprint Nextel USPX Omitted Staples NBIM - June Textron USPX Omitted Wells Fargo NBIM Allowed May Western Union NBIM Allowed May

×