Efforts to battle proxy access

News Brief

By Cydney Posner

You might want to take a look at this article in the WSJ regarding the mounting battle against proxy access. The article states that the "campaign has ramped into high gear in recent weeks because the measure looks like it will be passed by the Securities and Exchange Commission in November. In a last-minute bid to derail or weaken the measure, opposing groups have dispatched both Washington lobbyists and grass-roots letter-writers." The article speculates that, although there are currently sufficient SEC votes to adopt the proposal, it's possible that the SEC "will try to pick up more votes by changing its final recommendation. Republican Commissioner Troy Paredes, who voted against the proposal, said he would be willing to support a less-stringent rule that would let shareholders initiate a request for proxy access [i.e., through a shareholder proposal], rather than receiving it automatically [as the currently pending proposal is structured]." (You might recall that the alternative proxy access proposal considered and rejected in 2007 was structured to operate through a Rule 14a-8 shareholder proposal mechanism.) Despite the campaign against the measure, the article states that "most opponents expect the measure to pass. That is why most corporate comment letters advocate a weakened version. It is an outcome that many in the business community are now expecting, as a small SEC concession to business." Other possibilities for curtailing the proposal include raising the share ownership threshold or reducing the maximum number of directors shareholders can nominate.

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Cydney Posner Special Counsel, San Francisco
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