Tag: shareholder proposals
Investors challenge fund managers on say-on-pay vote practices
by Cydney Posner Support for management on say-on-pay votes for the 2016 season so far (data as of May 18) continues at about the same level as in prior years – a median approval rate of 95% among the S&P 500, according to Compensation Advisory Partners, with only three companies […]
Shareholder proposals to exclude the impact of buybacks from executive comp metrics — will they become a new trend?
A recurring demand by hedge fund activists is that the target company return capital to its shareholders by buying back its own stock. Data compiled by S&P and Bloomberg shows that companies in the S&P 500 spent 95% of their earnings on repurchases and dividends in 2014, including spending $553 billion on stock buybacks. But, in some cases, conducting a stock buyback can be an ultimatum with which company executives are actually happy to comply. Why? One of the more appealing consequences of the buyback trend for company executives is that, in some cases where compensation performance metrics are stock-price- or EPS-related, buybacks can juice executive compensation, irrespective of the operational success of the company. Now, some governance activists are beginning to challenge whether that favorable consequence should be curtailed.
Corp Fin allows exclusion of a conflicting shareholder proposal under Rule 14a-8(i)(9): does it represent a strategy for the future?
by Cydney Posner Well, we finally have some insight into what the Corp Fin staff had in mind in Staff Legal Bulletin 14H – of course, that’s the SLB in which Corp Fin narrowed the application of Rule 14a-8(i)(9), the exclusion for conflicting proposals. It turns out that what they had […]
Director resignation policies under fire
by Cydney Posner The originator of the “Pfizer model” of “plurality plus” voting for directors — Pfizer — will be facing a shareholder proposal (January 29, from the Chevedden folks) calling for a change to Pfizer’s governing documents and policies regarding majority voting. The “plurality plus” model requires directors to […]
Corp Fin Staff grants no-action relief allowing exclusion of shareholder proposals for proxy access under Rule 14a-8(i)(10)
by Cydney Posner Now that Corp Fin has issued Staff Legal Bulletin 14H providing guidance that, for most practical purposes, eliminates the availability of Rule 14a-8(i)(9) (see this PubCo post) to exclude shareholder proposals that conflict with management proposals, there has been substantial speculation about the contours of Rule 14a-8(i)(10), the exclusion for proposals […]
Trinity Wall Street withdraws cert petition in connection with shareholder proposal to Wal-Mart
by Cydney Posner In the case of Trinity Wall Street v. Wal-Mart Stores, Inc. (see this PubCo post), Trinity has asked to withdraw its petition to SCOTUS for cert, and the petition has been dismissed under Rule 46. As a result, SCOTUS won’t be sharing its views of the ordinary business […]
Highlights from panels with current and former staff of Corp Fin
by Cydney Posner Below are some highlights (from my notes) of the PLI Securities Regulation Institute panel discussions Thursday and Friday with the Corp Fin staff (Keith Higgins, Shelley Parratt, David Fredrickson, Michele Anderson, Karen Garnett) as well as a number of some former staffers, plus some additional discussion from […]
Corp Fin issues new SLB providing guidance on Rule 14a-8 exclusions for “conflicting proposals” and “ordinary business”
by Cydney Posner Corp Fin today posted Staff Legal Bulletin 14H providing guidance on two key issues regarding shareholder proposals under Rule 14a-8: the scope and application of Rule 14a-8(i)(9) (the exclusion for conflicting proposals); and the scope and application of Rule 14a-8(i)(7) (the exclusion for ordinary business) in light of Trinity […]
Trinity Wall Street files cert petition: will SCOTUS delve into the “ordinary business operations” exclusion for shareholder proposals?
by Cydney Posner You might recall Trinity Wall Street v. Wal-Mart Stores Inc, a case involving a shareholder proposal requesting that Wal-Mart’s board of directors develop a policy regarding the sale of high-capacity firearms, such as the AR-15 assault rifle, and other dangerous products. Wal-Mart sought to exclude Trinity’s proposal from […]
Is the SEC considering reproposing mandatory proxy access rules?
by Cydney Posner The SEC has posted a new staff working paper, “Public versus Private Provision of Governance: The Case of Proxy Access,” reporting on a study conducted by the SEC’s Division of Economic and Risk Analysis (DERA), of the “tradeoffs” between universal regulatory mandates and so-called “private ordering” in the […]
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