Keir Gumbs is a Chief Legal Officer at Broadridge. This post is based on his Broadridge piece. Related research from the Program on Corporate Governance includes Universal Proxies (discussed on the Forum here) by Scott Hirst.
The Universal Proxy: Background
Last year, the Securities and Exchange Commission’s universal proxy rule took effect. Prior to the rule’s adoption, companies and dissident shareholders sent separate proxy cards listing only their own slate of nominees for board of directors. It was difficult for shareholders to mix and match management and dissident nominees unless they attended a company’s annual meeting in person. Under the universal proxy rule, companies and dissidents are now required to use a universal proxy card that lists all of the nominees from both sides. The rule is triggered when a dissident solicits 67% of a company’s shareholders and complies with nomination procedures included in a company’s bylaws. As a result of the rule, shareholders can select the nominees they favor regardless of who nominated them.