Tuesday’s post, Proxy Access for the 99%, is drawing controversy among USPX members, with about 30 comments in the first couple of days. Will we reach consensus or will shareowners simply end up taking elements of the model proposal for their own use?
So far, and we are only two days in, the $2,000 threshold to nominate is the most controversial aspect of the model language. Should that be raised to “a significant stake” or would that simply favor institutional investors who are using other people’s money and have no actual “scratch” in the game? If making nominations is your day job, rather than a product of your own incentive, does it hold the same validity?
Another option is to require nominations to come from groups with as many $2,000 holders as there are members of the board.
Setting the number equal to the number of current board members would be a way of acknowledging that shareowners should have a right to nominate similar to that of the board. With this approach, Institutional investors would have to rely on their beneficial investors to form such nominating groups.
With this approach, we don’t abandon the Rule 14a-8 eligibility requirement. We just deploy it in a different way.
That’s just a flavor of one of nine topics. At this point we seem to be all over the map. However, we used a similar process to develop the Shareowner Guidelines For Say-On-Pay Voting and did reach a consensus, even though we all recognize they need further refinement, especially to address corporations of different sizes. The Guidelines were posted on August 3, 2011. I think they may actually begin to have any impact in the 2012 season.
I’m hopeful we’ll reach consensus on a model for proxy access as well. At this point the creative juices seem to be flowing and we’re still looking for more fresh ideas. It isn’t too late to get in on the action and help shape the future of Proxy Access for the 99%. Reference just went up at Accountability Central, so maybe that will attract more input from those more concerned with ESG/SRI.
Join the USPX and then join the new Proxy Access members group. At the members group you will see a topic for each of the nine resolved points, one for general comments, and one for targets. Please post comments by category. Don’t forget to e-mail me at [email protected], so I can add your e-mail address and phone to the master contact list and so that you can be included on upcoming teleconferences.