Tag: Proxy access


2016 Proxy Season: Engagement, Transparency, Proxy Access

Howard B. Dicker is a partner in the Public Company Advisory Group of Weil, Gotshal & Manges LLP. This post is based on a Weil publication; the complete publication, including footnotes and appendix, is available here. Related research from the Program on Corporate Governance includes Lucian Bebchuk’s The Case for Shareholder Access to the Ballot and The Myth of the Shareholder Franchise (discussed on the Forum here), and Private Ordering and the Proxy Access Debate by Lucian Bebchuk and Scott Hirst (discussed on the Forum here).

While shareholders have a wide spectrum of views on corporate objectives, the time horizon for realizing these objectives and environmental, social and governance (ESG) issues, there is an emerging consensus that—regardless of size, industry or profitability—public companies must achieve greater accountability to their shareholders, through engagement and transparency, than ever before. Corporate engagement and transparency now take two forms: direct dialogue, increasingly involving directors, and enhanced proxy statement and other public disclosure that sheds light on the company’s strategy and the performance of its board, board committees and management, demonstrates responsiveness to shareholder ESG concerns, and justifies the composition of the board in light of the company’s present needs. Throughout this post, we offer practical suggestions about “what to do now” to meet shareholder expectations about engagement and transparency and to address a host of other new developments for the 2016 proxy season.

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Ten Topics for Directors in 2016

Kerry E. Berchem is partner and head of the corporate practice group at Akin Gump Strauss Hauer & Feld LLP. This post is based on a summary of an Akin Gump publication authored by Ms. Berchem, Rick L. Burdick, Tracy Crum, Christine B. LaFollette, and J. Kenneth Menges, Jr. The complete publication is available here.

U.S. public companies face a host of challenges as they enter 2016. Here is our annual list of hot topics for the boardroom in the coming year:

  1. Oversee the development of long-term corporate strategy in an increasingly interdependent and volatile world economy
  2. Cultivate shareholder relations and assess company vulnerabilities as activist investors target more companies with increasing success
  3. Oversee cybersecurity as the landscape becomes more developed and cyber risk tops director concerns
  4. Oversee risk management, including the identification and assessment of new and emerging risks
  5. Assess the impact of social media on the company’s business plans
  6. Stay abreast of Delaware law developments and other trends in M&A
  7. Review and refresh board composition and ensure appropriate succession
  8. Monitor developments that could impact the audit committee’s already heavy workload
  9. Set appropriate executive compensation as CEO pay ratios and income inequality continue to make headlines
  10. Prepare for and monitor developments in proxy access

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ISS Proxy Access FAQs: Problematic Proxy Access Provisions

Howard B. Dicker is a partner in the Public Company Advisory Group of Weil, Gotshal & Manges LLP. This post is based on a Weil publication by Mr. Dicker, Lyuba Goltser, Joanna Jia, and Kaitlin Descovich.

Institutional Shareholder Services (ISS) has published revised FAQs for its U.S. Proxy Voting Policies and Procedures, including two new FAQs directly related to proxy access. This post provides an update to our Alerts dated October 21, 2015 (available here) on Navigating Proxy Access and November 23, 2015 (available here, and discussed on the Forum here) on ISS and Glass Lewis Updated Voting Policies.

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ISS and Glass Lewis Updated 2016 Voting Policies

Ellen Odoner and Lyuba Goltser are partners in the Public Company Advisory Group of Weil, Gotshal & Manges LLP. This post is based on a Weil publication by Ms. Odoner, Ms. Goltser, and Reid Powell. The complete publication, including appendices, is available here.

ISS and Glass Lewis have released updates to their proxy voting policies for the 2016 proxy season. [1] ISS has also modified its QuickScore 3.0 Technical Document and Equity Plan Scorecard. [2] In this post we provide guidance for U.S. public companies on addressing these developments.

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ISS 2016 Voting Policies

Andrew R. Brownstein is partner and co-chair of the Corporate practice group, and David A. Katz is a partner specializing in the areas of mergers and acquisitions, corporate governance and activism, and crisis management at Wachtell, Lipton, Rosen & Katz. This post is based on a Wachtell Lipton memorandum by Mr. Brownstein, Mr. Katz, David M. Silk, Trevor S. NorwitzSabastian V. Niles, and S. Iliana Ongun.

[November 20, 2015], ISS announced its final U.S. voting policies for the 2016 proxy season. ISS had previously released draft proposals on several of the topics in October. Changes to non-U.S. policies were also announced, including with respect to Brazil, Canada, France, Hong Kong & Singapore, India, Japan, the Middle East & Africa and the U.K. & Ireland. ISS also released an updated equity plan scorecard “FAQ,” which contains a new model index for large companies that are newly public or emerging from bankruptcy, as well as other minor adjustments to scorecard factors.

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Proxy Access: Preparing for the 2016 Proxy Season

Thomas W. Christopher is a partner in the New York office and Ryan J. Maierson is a partner in the Houston office of Latham & Watkins LLP. This post is based on a Latham publication by Mr. Christopher, Mr. Maierson, Tiffany Fobes Campion, and Charles C. Wang. Related research from the Program on Corporate Governance includes Lucian Bebchuk’s The Case for Shareholder Access to the Ballot and The Myth of the Shareholder Franchise (discussed on the Forum here), and Private Ordering and the Proxy Access Debate by Lucian Bebchuk and Scott Hirst (discussed on the Forum here).

As the 2016 proxy season approaches, every public company should consider its position on proxy access and should have a plan for responding to a shareholder proxy access proposal. Based on lessons learned from the 2015 season, this post summarizes:

  1. Actions a public company can take to prepare for receipt of a proxy access proposal.
  2. Whether a company should wait and react to a shareholder proxy access proposal or preemptively adopt its own proxy access regime.
  3. Alternatives available to a company following receipt of a proxy access proposal.

Proxy access is a mechanism that gives shareholders the right to nominate directors and have those nominees included in the company’s annual meeting proxy statement. Proxy access gained significant momentum in 2015, with approximately 100 proposals submitted to shareholders and approximately 58% of those proposals being approved by shareholders. [1] Very likely a number of public companies will be subject to proxy access proposals during the 2016 proxy season.

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2015 Corporate Governance & Executive Compensation Survey

Creighton Condon is Senior Partner at Shearman & Sterling LLP. This post is based on the introduction to a Shearman & Sterling Corporate Governance Survey by Bradley SabelDanielle Carbone, David Connolly, Stephen Giove, Doreen Lilienfeld, and Rory O’Halloran. The complete publication is available here.

We are pleased to share Shearman & Sterling’s 2015 Corporate Governance & Executive Compensation Survey of the 100 largest US public companies. This year’s Survey, the 13th in our series, examines some of the most important governance and executive compensation practices facing boards today and identifies best practices and merging trends. Our analysis will provide you with insights into how companies approach governance issues and will allow you to benchmark your company’s corporate governance practices against the best practices we have identified.

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SEC Rulings on Shareholder Proposals and Ordinary Business Rule

Elizabeth Ising is a partner and Co-Chair of the Securities Regulation and Corporate Governance practice group at Gibson, Dunn & Crutcher LLP. This post is based on a Gibson Dunn client alert by Ms. Ising, Sarah E. Fortt, Julia LapitskayaRonald O. MuellerKasey Levit Robinson, and Lori Zyskowski.

On October 22, 2015, the Securities and Exchange Commission’s (“SEC” or “Commission”) Division of Corporation Finance (the “Division”) issued Staff Legal Bulletin No. 14H (“SLB 14H”), setting forth a dramatically different standard for when it will concur that a shareholder proposal that conflicts with a company proposal can be excluded from the company’s proxy statement under Rule 14a-8(i)(9). The Division also reaffirmed its views on the application of the “ordinary business” standard in Rule 14a-8(i)(7). SLB 14H is available here.

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Recap of the 2015 Proxy Season

Avrohom J. Kess is partner and head of the Public Company Advisory Practice at Simpson Thacher & Bartlett LLP. This post is based on a Simpson Thacher presentation by Mr. Kess, Yafit Cohn, Arthur B. Crozier and Lissa Perlman. The complete presentation is available here.

Simpson Thacher & Bartlett LLP recently released a PowerPoint deck, titled “Recap of the 2015 Proxy Season: What Happened, Lessons Learned and Looking Ahead to 2016.”  The deck (available here) provides an overview of the 2015 proxy season, as well as in-depth analysis regarding key developments, proposals and trends from the proxy season.

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Getting Ready for Proxy Access

Nicolas Grabar is a partner at Cleary Gottlieb Steen & Hamilton LLP focusing on international capital markets and securities regulation. This post is based on a Cleary Gottlieb publication by Mr. Grabar & associate Leah LaPorte Malone. Related research from the Program on Corporate Governance about proxy access include Lucian Bebchuk’s The Case for Shareholder Access to the Ballot and The Myth of the Shareholder Franchise (discussed on the Forum here), and Private Ordering and the Proxy Access Debate by Lucian Bebchuk and Scott Hirst (discussed on the Forum here).

Proxy access will be a leading issue in the 2016 proxy season, and now is the time to make a plan. We have a detailed deck on these questions, available here, but in a nutshell this is what’s happening:

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