On other activism fronts.

AuthorMadden, John
PositionSHAREHOLDER ACTIVISM

In the area of corporate governance activity more generally, some of the noteworthy developments from the 2012 proxy season include the following (the data is derived principally from ISS published reports):

* Executive Compensation; Say on Pay. Executive pay continues to be a focus of significant investor attention. As in 2011, the 2012 say on pay voting results showed generally strong support for corporate executive pay plans, with some notable exceptions, particularly in the financial sector. At Citigroup, 55% of shareholders voting opposed the pay plan presented. And there was significant minority dissent at NYSE Euronext, Barclays, Credit Suisse, UBS, and Deutsche Bank. Shareholders continued to put forward various proposals on different aspects of executive pay. In fact, compensation-related shareholder proposals increased by 50% in 2012 over 2011, reflecting the return of investors to the use of shareholder proposals, in addition to say on pay, to encourage compensation reform.

* Majority Voting. Although majority voting in uncontested director elections was ultimately not included in the 2010 Dodd-Frank legislation, it has been aggressively and widely pursued as a shareholder proposal and consistently attracts substantial shareholder support. The percentage of S&P 500 companies with majority voting was practically negligible in 2000; whereas today, nearly 80% have adopted it in some form.

* Proxy Access. In August 2010, the SEC adopted its Rule 14a-11 allowing qualified shareholders (owning a 3% stake for three years) access to a company's proxy statement to nominate up to 25% of the board of directors. Although the rule was vacated in a court challenge in July 2011, the SEC alternatively made Rule 14a-8 available for shareholders to submit proposals for proxy access on a "private ordering" basis at individual companies. During the 2012 proxy season, 23 such proposals were submitted. Of that group, eight were excluded pursuant to companies' no-action" requests to the SEC and two were withdrawn pursuant to agreement (in one case, Hewlett-Packard, agreeing to submit the proposal to shareholders next year). Of the 12 proposals that...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT