Yesterday’s New York Times editorial favors the 1, 3, and 5% thresholds for proxy access advanced by the SEC’s proposed rulemaking. (Putting Investors First)
To get nominees on the proxy-card ballot, shareholders would have to own their shares for at least a year and would need substantial ownership stakes of at least 1 percent for large firms and 5 percent for small firms. Shareholder candidates could compete for a limited number of seats, ensuring that they could not wrest control from current boards.
Now that Dodd-Frank gives clear authority, we fully expect proxy access rules to be in place for next year. If it happens this month, it will have been eight years since Les Greenberg and I petitioned the SEC for the change. Of course, our proposal would have opened the floodgates to many more “contests,” since we essentially proposed the same $2,000 and one year threshold that existed before the SEC changed the rules without going through a rulemaking when it appeared that shareowners would be winning access proposals. (Populism Begins in the Boardroom) According to the NYT:
If it stands firm, the S.E.C. will begin to level the playing field in board rooms and gain public trust in the agency’s ability and willingness to carry out financial reform in the best interests of investors.
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