Proxy Access: not a question of “if,” but “when”?

by Cydney Posner

This article in the WSJ observes that there appears to be a major shift in the viability of proxy access, as a growing number of companies are adopting bylaw amendments or are expected to submit the matter to shareholder votes this proxy season. The article quotes NYC comptroller Scott Stringer, whose Boardroom Accountability Project resulted in submission of proxy access shareholder proposals to 75  companies this proxy season, concluding that “[w]e have passed the tipping point on proxy access….It’s no longer a question of ‘if’ as much as it is ‘when.’” (See this post for a status update.) 

In addition to the NYC Comptroller, there are some more discreet agitators for proxy access. According to the article, TIAA-CREF, a large financial services provider, “quietly launched its own proxy access campaign last month,” sending a letter to its top 100 U.S. holdings urging “those companies to voluntarily endorse proxy access during the next six to eight months. This marks the first time TIAA-CREF has mounted a letter-writing campaign aimed at so many U.S. companies…. The asset manager wanted to put ‘the issue on an express train,’ rather than wait years for numerous shareholder measures to pass….Among the 100 companies targeted by TIAA-CREF was Prudential, which last week approved proxy access without a proposal from an investor. Prudential’s decision reflects ongoing discussions with its shareholders including big institutional investors like TIAA-CREF, a person familiar with the company’s thinking said.”

Trade groups opposed to proxy access, such as the U.S. Chamber of Commerce and the Society of Corporate Secretaries and Governance Professionals, are not going down without a fight. The article observes that these groups “are warning regulators and lawmakers that the proliferation of proxy access will lead to the nomination of ‘special interest’ directors, harming long-term shareholders. [A Chamber representative] said it would give unions additional leverage at companies they are seeking to organize.”

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