Initial 2013 Annual Meeting Results: Six Board Declassification Proposals Passed with Average Support of 79%

Editor’s Note: Professor Lucian Bebchuk is the Director of the Shareholder Rights Project (SRP), Scott Hirst is the SRP’s Associate Director, and June Rhee is Counsel at the SRP. The SRP, a clinical program operating at Harvard Law School, works on behalf of public pension funds and charitable organizations seeking to improve corporate governance at publicly traded companies, as well as on research and policy projects related to corporate governance. Any views expressed and positions taken by the SRP and its representatives should be attributed solely to the SRP and not to Harvard Law School or Harvard University. The work of the SRP has been discussed in other posts on the Forum available here.

Although the 2013 proxy season is still in its early stages, board declassification proposals submitted by the Shareholder Rights Project (SRP) on behalf of SRP-represented investors have already gone to a vote at the 2013 annual meetings of six S&P 500 and Fortune 500 companies, and these proposals all passed by substantial majorities, receiving average support of 79% of votes cast.

This result continues the strong record of success for SRP-represented investors in 2012, and reflects the on-going strong support for board declassification among institutional investors. The table below provides information concerning these six precatory declassification proposals, all submitted on behalf of the Massachusetts Pension Reserves Investment Management Board (PRIM).


Company % of Votes
Cast in Favor
Air Products and Chemicals, Inc. (APD) 80.2%
Ashland Inc. (ASH) 82.6%
Costco Wholesale Corporation (COST) 71.9%
Jacobs Engineering Group Inc. (JEC) 82.2%
Rockwell Collins, Inc. (COL) 83.0%
Varian Medical Systems, Inc. (VAR) 74.8%
Average: 79.1%

These six precatory declassification proposals that have gone to a vote are among the 74 proposals submitted by the SRP on behalf of SRP-represented investors for voting at the 2013 annual meeting of S&P 500 and Fortune 500 companies with classified boards. More information on the 74 proposals is available here.

During 2012, precatory declassification proposals submitted by the SRP on behalf of SRP-represented investors went to a vote at annual meetings of 40 S&P 500 companies. Of these 40 proposals, 38 proposals passed (95% of the proposals that went to a vote). These 38 successful proposals were approved by substantial majorities, with average support of 82% of votes cast. Moreover, these 38 successful proposals represented more than 60% of the shareholder proposals by public pension funds that received majority support in 2012, and more than 30% of all precatory shareholder proposals (by all proponents) that received majority support in 2012. Additional information regarding the results last year can be found here as well as in the SRP’s 2012 annual report.

We hope that the boards of these six S&P 500 and Fortune 500 companies where declassification proposals passed will follow the strongly expressed preferences of their shareholders and bring management proposals to declassify to a vote at their 2014 annual meetings. We note that, of the 38 companies where declassification proposals submitted by SRP-represented investors passed at 2012 annual meetings, a substantial proportion are expected to move towards annual elections by the end of 2013. For further details on this expected movement, see the SRP’s 2012 annual report.

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