You may recall that, last month, Corp Fin announced that it had revisited its approach to responding to no-action requests to exclude shareholder proposals. In essence, under the new policy, the staff may respond to some requests orally, instead of in writing, and, in some cases, may decline to state a view altogether, leaving the company to make its own determination. (See this PubCo post.) In its most recent proxy guidelines, Glass Lewis explains its expectations from companies in light of the new approach.
The newest SEC Commissioner, Elad Roisman, who has reportedly gotten the nod to head up the SEC’s efforts regarding proxy advisory firms, told the U.S. Chamber of Commerce in late March that he expects the SEC to issue new guidance, sometime after proxy season this year, regarding the use by institutional investors of proxy advisory firm recommendations, as reported in The Deal. And, according to the WSJ, Roisman has “also questioned whether it was appropriate for the SEC to exempt proxy advisers from some regulations on investment advice, including whether they can both advise a company and make recommendations to its shareholders at the same time.” However, as discussed in this PubCo post, the question of whether proxy advisory firms, such as ISS and Glass Lewis, have undue influence over the voting process and should be reined in has long been something of a political donnybrook. With the issue of proxy advisory firm regulation so politically freighted, will the SEC limit the scope of its effort to guidance to institutional investors or, more controversially, go further and impose regulation on proxy advisors, as many companies have advocated?
Proxy advisor Glass Lewis has posted its 2019 Proxy Guidelines and 2019 Guidelines Regarding Shareholder Initiatives. One of the more striking points is that GL indicates that it may, albeit in limited circumstances, recommend against the members of the nominating/governance committee simply for successfully requesting no-action relief from the SEC to exclude (and presumably excluding) a shareholder proposal, where GL views the exclusion to have been detrimental to shareholders. GL’s new guidance includes the following updates:
by Cydney Posner If you haven’t already, please check out our recent Cooley Alert, ISS and Glass Lewis Update 2017 Proxy Voting Policies. It’s a great way to start the new year and a lot more fun than a diet!
by Cydney Posner Companies are paying increased attention to the potential for director “overboarding,” according to the WSJ. Many companies have adopted restrictions on the number of outside seats that directors may hold, often in response to shareholder requests. In addition, some institutional shareholders are guided in their voting by […]
by Cydney Posner Nasdaq and the U.S. Chamber of Commerce conducted a survey of public companies to gain insight into companies’ interactions with ISS and Glass Lewis, the two primary proxy advisory firms, with regard to the 2015 proxy season. Over 155 companies of all sizes and industries participated in […]
by Cydney Posner At the end of last week, as discussed here, proxy advisory firm Glass Lewis told the WSJ that, in some circumstances, it may recommend against company nominees for director when the company excludes a shareholder proposal for proxy access on the basis of a conflicting management proposal. That […]