A handful of large US companies have voluntarily implemented proxy access and several others face proposals from shareholders.
Activist investor groups and proxy access advocates hoping for the reinstatement of mandatory access to the corporate proxy should not hold their breathe. Speaking at this week’s Council of Institutional Investors Spring Conference, SEC commissioner Troy Paredes, said that he does not see the Commission pursuing rule 14A-11 and launching a challenge to the court ruling that overturned its implementation, at least in the near term.
Paredes told Jane Hamblen, chief legal counsel, State of Wisconsin Investment board, that he had voted against 14A-11 both at the policy formation and implementation stages because of the mandatory nature of the rule.
‘I think the private ordering rules under 14A-8 are the right way to go and we support that. We need to give private ordering time to play out and see how things develop. I think it is all about information and investors are getting access to more information which provides given greater ability to make informed choices about the boards that represent them. Investors have a useful tool with 14A-8 and we will be monitoring the situation closely this year,’ he explains.
A handful of large US companies have voluntarily implemented proxy access and several others face proposals from shareholders. It is expected there will be in the area of 40-50 proposals faced by companies this year.
Those investors looking to put forward an access proposal need to be careful not to over reach with the proposal language. In early March the SEC upheld no-action letters from 10 companies on the grounds that they violated 14A-8 subsections (b) and (c) meaning the proposals were deemed to contain more than one proposal or were not self-contained. The message for investors looking to file a successful proposal that will survive the no-action process is to closely follow the US Proxy Exchange’s model proxy access proposal.
