Tag Archives | universal proxy

CII: William Hinmam Interviewed

Keynote Interview: William Hinman of the SEC

William Hinman, Director of the SEC’s Division of Corporation Finance, was interviewed by CII Co-Chair Gregory Smith, Executive Director, Colorado Public Employees Retirement Association at #, I scribbled a few notes.

As you can well imagine for someone speaking from such a sensitive position, there were no bombshell announcements. However, it is certainly good to have a dialogue between CII members and the head of CorpFin. William Hinman did not disappoint.

William Hinman: Disclaimer

I am sure Hinman gave a disclaimer but this is mine. My skills as a journalist are limited to those of the typical sociologist. I only took a few notes on what I thought was timely. If you were there and heard something else, let us know by leaving a comment below sending me an email. Even if you were not there but have something to contribute, please do so.

William Hinman: What I Think I Heard

The SEC’s job is protecting investors without overburdening issuers. They recently revised the rules so that companies can stay private longer with more shareholders. Private markets are developing so that more employees can redeem early shares without the need to go public. See CII: Public Companies Endangered Species?

The massive breach at Equifax is likely to hurt — and may ultimately doom — efforts by Republicans to overturn the Consumer Financial Protection Bureau’s rule banning mandatory arbitration clauses. Will mandatory arbitration change? William Hinman discussed s0me of the issues. For background, see Arbitration Clauses and Class Certification Standards: How the Supreme Court Is Limiting Plaintiffs’ Ability to Maintain Class Actions. He said the SEC would have to analyze the issue if it comes up. However, he does not see it as a rule-making issue… at least not for now.

Universal proxy? Yes, it is widely seen as a positive move. SEC Chair Jay Clayton is reportedly concerned with retail. As I recall (that’s me, not Hinman), Clayton thinks universal proxies will lead to confusion among retail investors. To me, nothing could be further from the truth. Getting multiple proxies and timing delivery is more confusing than anything a universal proxy could add. Mr. Smith said, CII also thinks multiple proxy cards are confusing to retail.

Hinman responded saying SEC may seek still more comments. The debate among commissioners mostly revolves around the level of solicitation effort a dissident must undertake. The currently proposed rule requires that a majority of shareholders be solicited.  What if they don’t solicit? What is the penalty? Background: Four-Year Effort to Allow Universal Proxy Cards for Contested Shareholder Elections Moves Through SEC Channels.

The SEC Looked at 280 no-action letters. In 75% of cases, they agreed with the company. I know that our little group lost far more no-actions than ever this year (specifically on proxy access amendments) because we tried to “compromise” with issuers over raising the group limits for proxy access.

We generally requested fifty, instead of no group limit. That turned out to be a mistake because it was more difficult to prove that limit of 50 (our proposals) was substantially different than a limit of 20 (the most common group limit in company bylaws). Next year should see fewer successful no-actions as our group moves back to requesting no limit.

Of course, those SEC numbers also don’t take into account that shareholders like me essentially withdrew proposals in many cases because companies moved in the right direction. For example, I recently withdrew a proposal at Symantec (SYMC), during the no-action process, because SYMC raised the group limit for proxy access to 50. That kind of partial victory happened in almost 50 cases. Seen in that light, the report that 75% of cases were decided in favor of companies is tempered.

William Hinmam indicated there is a new focus on proxy plumbing. Background: Fixing the stock market’s ‘clogged toilet’ starts in Delaware. Additionally, staff will put out a new SLB (Staff Legal Bulletin) as a result of the annual stakeholder meeting and other input. See my Shareholder Action Handbook for a crude index of SLBs. Suggestions for better descriptors are welcome.

Proven Shareowner Action Formulas


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Financial CHOICE Act: Take Action

Financial CHOICE Act Does Away with Shareholder Proposals

Financial CHOICE Act Does Away with Shareholder Proposals

The draft Financial CHOICE Act, among other things, would take away a shareholder’s choice to file proxy proposals, their choice to refile similar proposals in subsequent years, their choice to use an agent to help them file and their right to choose from competing candidates unless they attend the meeting in person. The draft Financial CHOICE Act will be heard by the Financial Services Committee on Wednesday April 26 at 10 a.m. Take Action: Contract Committee members and staff to express your opposition (contact information below).

See most problematic language for shareholders, Shareholder proposal process in the crosshairs, full discussion draft and summary of a couple of key sections. Continue Reading →

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Directors Forum 2017 & Trump – Part 1

Linda Sweeney - Eec Director - Directors Forum 2016

Linda Sweeney – Exec Director – Directors Forum 2016

Directors Forum 2017 in San Diego was billed as Directors, Management, & Shareholders in Dialogue. Sure, all well and good, but I went there also hoping to learn more about President Donald J. Trump. He is the subject of a huge portion of tweets, Facebook posts and much of the news, so I expected Trump to also be the center of attention at Directors Forum 2017.

Directors Forum 2017 - iJoan B. Kroc Institute for Peace Justice

Directors Forum 2017 – Joan B. Kroc Institute for Peace Justice

I know what those in my immediate circles in Sacramento are saying. Clinton got 58% of the vote to Trump’s 34%. My news silos are much the same. At Directors Forum 2017 were directors and managers from companies, large and medium (the focus is rarely on small companies, although the Forum does better than most). Investors representing trillions of dollars in assets were in the room and on stage. What was the speculation on Trump and his impact on what we do? Continue Reading →

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Society of Corporate Secretaries & Governance Professionals: Part 1

Society of Corporate Secretaries & Governance Professionals

What a mouthfull. The 2015 National Conference in Chicago, 6/24-27, was my first time attending one of their events. Even though I’ve been blogging about corporate governance for almost 20 years, I didn’t know what they call themselves?  SCSGP? Even that is a mouthful; without vowels how would I pronounce it? Maybe “Corporate Secretaries?” It turned out to be just the “Society.” Like Modonna, Yanni, Sher, Twiggy, Enya, Charo, Bono and Voltaire, only one name is needed.  All those other societies will have to come up with other options to avoid confusion.  Continue Reading →

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Take Action: Support CII Rulemaking Petition for "Universal" Proxy

CII-logoThe Council of Institutional Investors (CII) filed a rulemaking petition with the Securities and Exchange Commission (SEC) asking that it amend its rules for contested elections so that “shareholders can vote for any combination of management and dissident nominees they wish to represent them.”  I hope readers will join with me in sending e-mails in support of the petition to the SEC.  Instructions on how to do so can be found at the bottom of this post. 

This petition is a followup to action they took on July 23, 2013 when the Policies Committee of CII approved a draft proposal for a Universal Proxy. Key, was addition of the following sentence to their policy on director elections:

To facilitate the shareholder voting franchise, the opposing sides engaged in a contested election should utilize a proxy card naming all management-nominees and all shareholder-proponent nominees, providing every nominee equal prominence on the proxy card.  Continue Reading →

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Proxy Access: What Now, With Ban to be Lifted?

The SEC will not challenge the decision of the U.S. Court of Appeals for the District of Columbia Circuit, No. 10-1305, which struck down the agency’s rule to make it easier for shareowners to nominate directors to corporate boards. (see SEC Fails to Appeal on Proxy Access, 9/6/2011 and Statement by SEC Chairman Mary L. Schapiro on Proxy Access Litigation) That leaves Rule 14a-8(i)(8), which wasn’t challenged. I have a few recommendations for the path forward. According to the statement by Schapiro:

The Commission’s stay order provides that the stay of the effective date of the amendments to Rule 14a-8 and related rules will expire without further Commission action when the court’s decision is finalized, which is expected to be September 13. Accordingly, absent further Commission action, Rule 14a-8 will go into effect and a notice of the effective date of the amendments will be published.

In Proxy Access: Next Steps for Shareowners I noted that Rule 14a-8(i)(8) amendments adopted by the SEC were stayed by the Commission because they were Continue Reading →

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