Last week Institutional Shareholder Services updated its proxy voting guidelines for annual shareholder meetings to be held on or after February 1, 2020. The updates take a major step forward to advocate greater gender diversity on public company boards, express fresh opposition to super-voting shares and evergreen plan provisions, enhance support for independent board chairs, and make other important modifications.
On March 20, 2019, the SEC amended its disclosure requirements to ease reporting burdens for most public companies. While no individual change is particularly noteworthy, the aggregate impact of the changes should generally simplify the reporting process. A few changes will require modest additional disclosures. The most significant changes are:
The Securities and Exchange Commission has finally adopted new rules that will require public companies to include in proxy statements for their annual meetings a description of their hedging policies and practices applicable to employees and directors. These rules were called for by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 but weren’t proposed until February 2015. The new rules will apply to proxy and information statements with respect to the election of directors during fiscal years beginning on or after July 1,… More
The Staff has confirmed that the (often forgotten) requirement that public companies mail seven copies of their glossy annual report to the SEC may be satisfied by posting an electronic version of the report on the company’s corporate website. The report must remain accessible for at least one year after posting.
Public companies are already required to post proxy materials, which include proxy statements on Schedule 14A,… More
Decisions, decisions.
Instead of requiring an annual “say on pay” vote, rules implemented pursuant to the Dodd‑Frank Act require that an advisory vote on executive compensation occur at least once every three years. To further complicate matters, at least once every six years stockholders must also be given an opportunity to vote separately on whether the “say on pay” vote should occur every year, every other year or every three years.… More
Investor advocates are turning the spotlight on the corporate governance practices of newly public companies that they regard as hostile to shareholder interests. In connection with their IPOs, most companies adopt customary defensive measures to protect themselves from activist investors, who might otherwise take advantage of their typically smaller market capitalizations to try to seize control of the company. These measures often include a classified board of directors, whose terms are staggered over three years. … More
Public companies listed on NASDAQ are now required to disclose annually certain payments (if any) made by third parties to their directors or director nominees.
D&O questionnaires related to the annual meeting of stockholders should include a question to determine whether there are any agreements, arrangements or understandings between a director or director nominee and any person (other than the company) relating to compensation or other payments (including non-cash payments) in connection with the director’s or director nominee’s service or candidacy as a director.… More