Tag Archives: proxy access

It’s baaaack — the Financial CHOICE Act of 2017

by Cydney Posner

A draft of the Financial CHOICE Act of 2017 (fka version 2.0), a bill to create hope and opportunity for investors, consumers, and entrepreneurs — a masterpiece of acronyming — has just been released (and weighs in at 593 pages).   The bill, sponsored by Jeb Hensarling, Chair of the House Financial Services Committee, was framed as a Republican proposal to reform the financial regulatory system and relieve the affliction of Dodd-Frank. In addition to taking aim at much of Dodd-Frank, among other things, the bill places a heavier burden on regulators and proxy advisory firms generally, eliminates a lot of studies and repeals or eases a number of regulations. A hearing in the House has been scheduled for this week. The bill never made much progress when it was originally introduced last year (as version 1.0), but with Congress and the Presidency now in Republican hands, its chances of survival in some form are immensely greater.  Of course, the Senate Dems could filibuster — assuming, that is, that the legislative filibuster survives that long — the Senate version of the bill, or threaten to do so, which could lead to some negotiation.

While the vast majority of provisions in the draft bill relate to the banking provisions of Dodd-Frank and the Consumer Financial Protection Bureau, some are related to new requirements for agency rulemaking, capital formation, compensation and corporate governance matters, and other matters of interest. Selected provisions are summarized below: Continue reading

Leave a comment

Filed under Accounting and Auditing, Corporate Governance, Executive Compensation, Litigation, Securities

SEC continues to grant no-action relief in connection with proxy access fix-it proposals

by Cydney Posner

The SEC has posted a number of additional Corp Fin responses to requests for no-action, as well as to requests for reconsideration of previous denials of relief, regarding shareholder proposals to amend proxy access bylaws, so-called “fix-it” proposals. In all cases, the companies argued that they should be permitted to exclude the fix-it proposals as “substantially implemented” under Rule 14a-8(i)(10). The requests were successful in obtaining no-action relief in all cases except one. As in the past, the staff has not identified the key determining factor, but companies now seem to have found a formula for successfully excluding these proposals. Continue reading

Leave a comment

Filed under Corporate Governance, Securities

Another theory on Corp Fin’s position on proxy access fix-it proposals

by Cydney Posner

Corp Fin has refined its position with regard to exclusion of proposals to amend existing proxy access bylaws.  However, the basis for the staff’s determination to grant or refuse no-action relief in that context remains a conundrum.
Continue reading

Leave a comment

Filed under Corporate Governance, Securities

Corp Fin refines its position on proxy access fix-it proposals (updated)

by Cydney Posner

Corp Fin has refined its position with regard to exclusion of proposals to amend existing proxy access bylaws.  As you may recall, the line drawn so far by Corp Fin has been that, where the shareholder proposal related to initial adoption of proxy access, Corp Fin has continued to grant no-action relief and permit exclusion of proxy access proposals as “substantially implemented” under Rule 14a-8(i)(10), so long as the bylaw provisions adopted by the companies contained the same eligibility percentage and duration of ownership thresholds (3%/3 years) as in the proposal, even though the bylaws also included  a number of “procedural limitations or restrictions that were inconsistent with or not contemplated by the proposals.”  However, with regard to shareholder proposals to amend a company’s existing proxy access bylaw — so-called “fix-it” proposals — the staff had refused to grant no-action relief on that same basis. Meanwhile, both proponents and companies have been exploring the contours of those staff positions, trying to determine how best to advance their opposing arguments. (See this PubCo postthis PubCo post and this PubCo post.) In a series of no-action letters recently posted, Corp Fin has permitted exclusion of some fix-it proposals under Rule 14a-8(a)(i)(10) on the basis that the proposals have been “substantially implemented,” but denied relief for others. Although the staff’s rationale is far from exquisitely clear, nevertheless, companies seeking to exclude fix-it proposals at least now have some successful models on which to base their requests. (For another theory, see this PubCo post.) Continue reading

Leave a comment

Filed under Corporate Governance, Securities

Update on proxy access proposals

by Cydney Posner

What’s the latest on proxy access proposals?  As you may recall, the line drawn so far by Corp Fin has been that, where the shareholder proposal related to initial adoption of proxy access, Corp Fin has continued to grant no-action relief and permit exclusion of proxy access proposals as “substantially implemented” under Rule 14a-8(i)(10), so long as the bylaw provisions adopted by the companies contained the same eligibility percentage and duration of ownership thresholds (3%/3 years) as in the proposal, even though the bylaws also included  a number of “procedural limitations or restrictions that were inconsistent with or not contemplated by the proposals.”  However, with regard to shareholder proposals to amend a company’s existing proxy access bylaw — so-called “fix-it” proposals — the staff has refused to grant no-action relief on that same basis. Meanwhile, both proponents and companies have been exploring the contours of those staff positions, trying to determine how best to advance their opposing arguments. (See this PubCo post and this PubCo post.)  Continue reading

Leave a comment

Filed under Corporate Governance, Securities

Environmental shareholder proposals increase in frequency and sophistication, but will they continue to be viable?

by Cydney Posner

In this article, the WSJ discusses the increased frequency and sophistication of shareholder proposals regarding the environment. In particular, the piece observes that shareholder proposals focusing on environmental issues have evolved “from requests for greenhouse gas emissions cuts to demands for disclosure of strategies to manage climate risks and for linking executive pay with sustainability performance.” But, with the imminent change to a new administration at the federal level, will these sustainability proposals continue to be viable?  Continue reading

Leave a comment

Filed under Corporate Governance, Securities

Will we see more activists using proxy access?

by Cydney Posner

You might recall that, on November 9, 2016, GAMCO Asset Management Inc. (an entity affiliated with activist investor Mario Gabelli) and certain affiliates used the proxy access bylaws recently adopted at National Fuel Gas Company, an NYSE-listed diversified natural gas company, to nominate a candidate for election to the company’s board at its 2017 annual meeting. It is the first known use of proxy access bylaws to make a nomination.  (Here is a link to the related Schedule 14N.) As I noted in this PubCo post, it was especially ironic that the first use of proxy access would be by an activist investor, given that the conventional wisdom has been that activists were unlikely to use proxy access and would opt instead for more traditional election contests. Some commentators still think that will be the case. Continue reading

Leave a comment

Filed under Corporate Governance, Securities