Proxy Monitor 2016 — Finding 1: Proxy Access

As June draws to a close, so does corporate America’s 2016 proxy season, when most large publicly traded companies hold annual meetings; at these meetings, corporate shareholders cast votes on ballot items—typically by proxy—considering questions placed on ballots distributed under rules promulgated by the Securities and Exchange Commission. This finding explores the recent push for “proxy access,” the idea that shareholders should have the right to place their own nominees for director on corporate proxy ballots to compete with boards’ own director nominees.

• After 2015, when a majority of shareholders at two-thirds of companies supported proxy-access shareholder proposals, in 2016 most companies appear to have decided to adopt a proxy-access rule rather than fight it.
• Companies clearly have some latitude about how to structure such a rule if they communicate with their shareholders; in general, companies that would prefer proxy access for no more than 20 percent of board seats appear likely to win shareholder support.
• Shareholders appear willing to embrace a limit on the number of shareholders who can combine their ownership interests to nominate directors.

FULL REPORT AT PROXYMONITOR.ORG