Stay current on changes and developments in corporate law with a wide variety of resources and tools.
By Che Odom
Jan. 12 — In what promises to be another busy year for proxy access, the New York City Pension Funds announced that they have filed access resolutions at 72 companies.
In a Jan. 11 release, New York City Comptroller Scott Stringer said he is targeting 36 new companies this year that, among other problems, are “board diversity laggards” or have “excessive CEO pay.”
In addition, Stringer said he submitted resolutions at 36 companies that he targeted last year because they have yet to enact or agree to enact “viable” bylaws, or have “unworkable bylaws.”
Meanwhile, the California Public Employees' Retirement System also is gearing up to submit access resolutions, according to Todd Mattley, investment officer at CalPERS's global governance team.
“We think 2015 was very successful for the first year of a widespread proxy access campaign,” Mattley told Bloomberg BNA in an interview Jan. 12. “We expect this positive momentum to continue in 2016.”
Under proxy access, shareholders are allowed to nominate directors and have their nominees included in the company's annual meeting proxy materials.
According to Bloomberg BNA data, 115 companies adopted proxy access in 2015, and the New York City Comptroller's office and CalPERS are two of the cause's largest proponents. In fact, Stringer jumpstarted the mechanism in the 2015 season when he submitted resolutions to 75 companies as part of the Board Accountability Project (29 CCW 362, 11/26/14).
Attempts to reach officials from Stringer's office were not successful.
Meanwhile, Mattley told Bloomberg BNA that proxy access is a strategic priority for CalPERS, and “in principle we would advocate this provision at all of our portfolio companies.”
“For CalPERS, board quality—specifically diversity, independence and competence—are critical areas of focus,” Mattley continued. “Where there are areas of concern, proxy access will help ensure corporate boards remain accountable to shareowners.”
Mattley said CalPERS expects to file the same kinds of proposals this year that it filed in 2014, pushing for an eligibility threshold of 3 percent stock ownership for three years.
“What we are finding is companies are getting more comfortable with these thresholds,” he said, adding that engagements with companies involve working through the “finer points on how to implement a shareholder-friendly bylaw provision.”
As proxy access remains key in 2016, engaging with shareholders—whether they be the New York City Comptroller, CalPERS or the Vanguard Group—is a must for companies, Yafit Cohn, of counsel in the New York office of Simpson Thacher & Bartlett LLP, told Bloomberg BNA in a Jan. 12 e-mail.
“As is the case with all other governance changes, it is critical that publicly traded companies engage with their shareholders to understand their views and take those views into account when making decisions on how to proceed with regard to proxy access,” said Cohn, whose practice focuses on corporate governance and compliance matters. “What the Comptroller's Office deems ‘unworkable' may be precisely what a particular issuer's shareholders are looking for.”
Companies should expect shareholders to be focused on the number of director nominees allowed, the number of stockholders who can aggregate to form a nominating group and whether loaned shares should be counted toward the ownership threshold, among other issues, she said.
To contact the reporter on this story: Che Odom in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Yin Wilczek at email@example.com
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 firstname.lastname@example.org.
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 email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)