Predictions for 2012 Proxy Season

Francis H. Byrd asked several of us in the corporate governance industrial complex to make predictions for the 2012 proxy season and beyond. I urge you to read the Laurel Hill Advisory Group’s pdf, Predictions and Expectations for 2012. Just a few brief highlights below (read the pdf for attribution):

  • Peer group issues: Will ISS get them right for pay related proxy issues?
  • Less than 10% no votes expected on pay.
  • Private claw back law suits will be filed.
  • Shareholders seek to replace non-responsive boards through majority voting and proxy access.
  • 2012 will mark the peak of shareholder primacy for now.
  • “Cost-benefit analysis” will be a constant theme in Congress and the SEC.
  • Proposals that relate to corporate political activity will increase in volume and support.
  • A court will dismiss a rule 14a-8 case based upon Sandoval and the SEC will fail to enforce it.
  • More boards will take true responsibility for CEO succession planning.
  • Disclosure will increasingly become more process-descriptive than boilerplate.
  • By 2013 we will see the beginnings of real shareowner forums.
  • Investor “relations” will begin to shift toward investor services or “representation.”
  • Executive pay levels will continue to increase at little more than an inflationary pace.
  • Welcome to the brave, new world of proxy access private ordering!

If the status quo is maintained in Washington or if the Republicans can win either the White House or Senate the rollback will begin before the new President even takes his oath of office. If however the Democrats keep the Presidency and the Senate and realize extensive gains in the House (few professionals doubt Democrats can win back the House in one cycle) governance advocates and their allies on Capitol Hill and perhaps in the White House will be on the offensive – Occupy Wall Street and the populist anger is not gone just hibernating for the winter.

Thanks to Francis H. Byrd, who did a great job of pulling these predictions together. It will be interesting to see which we can prevent and which we can ensure get implemented. Have at it!

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