Stay current on changes and developments in corporate law with a wide variety of resources and tools.
Nov. 21 — Proxy advisory firm Institutional Shareholder Services Inc. announced Nov. 21 that it has changed how it evaluates U.S. corporate charter provisions that make it more difficult for investors to file shareholder proposals.
Under its new policy, ISS will recommend withholding support from governance committee directors if their companies have charter provisions that impose “undue restrictions on shareholders’ ability to amend the bylaws.” Such restrictions include raising the $2,000 minimum stock threshold to file shareholder proposals, ISS said.
The change is one of several updated benchmark policies that the proxy adviser will apply to shareholder meetings on or after Feb. 1, 2017.
Under current Securities and Exchange Commission rules, a shareholder must have $2,000 or more stock for one year in order to submit a shareholder proposal. However, some states allow companies to further restrict or eliminate the right to file a binding shareholder proposal.
“These prohibitions amount to a material diminution of shareholder rights,” ISS said in providing its rationale for the policy change. “Although some companies have offered management proposals as alternatives, these often have greater ownership or holding period requirements and have typically not been well received by the shareholders of non-controlled companies.”
Meanwhile, business representatives have lobbied for the SEC’s shareholder proposal process to be overhauled to increase such thresholds. Recently, Business Roundtable President John Engler told House lawmakers that the SEC process has become outdated and is being abused by corporate gadflies and political activist investors.
ISS also made several other changes to its benchmark polices, which included:
To contact the reporter on this story: Michael Greene in Washington at mGreene@bna.com
To contact the editor responsible for this story: Yin Wilczek at firstname.lastname@example.org
An executive summary of the benchmark policy updates is available at https://www.issgovernance.com/file/policy/executive-summary-of-key-2017-updates-and-policy.pdf.
ISS’s complete U.S. proxy voting guideline updates are available at https://www.issgovernance.com/file/policy/2017-americas-iss-policy-updates.pdf.
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)