Proxy Access Marches On: Bank of America Announces Adoption

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By Yin Wilczek

March 20 — Bank of America Corp. has become one of the latest companies to adopt proxy access, according to a March 20 corporate filing.

In a Form 8-K filed with the Securities and Exchange Commission, the bank said it amended its bylaws March 17 to include a provision allowing “a stockholder, or a group of up to 20 stockholders, owning continuously for at least three years shares of the Corporation representing an aggregate of at least three percent of the voting power entitled to vote in the election of directors, to nominate and include in the Corporation’s annual meeting proxy materials directors constituting up to 20 percent of the Board.”

Spokesman Lawrence Grayson told Bloomberg BNA that the bank took the step after “numerous discussions with a range of shareholders on the issue.”

Priceline Group 

Similarly, the Priceline Group Inc. announced in a March 19 Form 8-K that it amended its bylaws to adopt proxy access.

Priceline's new bylaw will allow “a single stockholder or group of up to 20 stockholders that have collectively owned at least 5 percent of the Company's outstanding common stock for at least 3 years” to include their director nominees on the company's proxy card. Priceline's eligible shareholders will be able to nominate up to 20 percent of the board.

Proxy access is gaining new momentum in the 2015 season, partially as a result of 75 access resolutions submitted by New York City Comptroller Scott Stringer last fall, as well as a strong push by institutional investors.

Observers say there are probably about 20 companies so far that have adopted the mechanism or pledged to adopt it, including Prudential Financial Inc. and General Electric Co..

“This is a watershed year for proxy access,” said Amy Borrus, deputy director of the Council of Institutional Investors, a group that strongly supports the issue.

Securities and Exchange Commission Chair Mary Jo White said in March 24 congressional testimony that she is monitoring the developments in this area, but does not plan a rulemaking on proxy access at this time.

No Uniform Approach 

Despite the flurry of activity, the corporate approach to proxy access is by no means uniform, even within the same sector.

In the oil and gas industry for example, Marathon Oil Corp. said in a March 18 filing that its board is “committed to adopting proxy access.”

However, the company urged its shareholders to vote against an access resolution submitted by Stringer, arguing that the proposal is “unnecessarily expansive and support for this stockholder proposal will preempt our efforts to adopt proxy access on terms that reflect the views of all of our stockholders.” It also noted that there are “additional unique factors of the exploration and production business model that require a judicious approach to proxy access.”

“The Board is committed to adopting proxy access and believes it should have sufficient time to complete its outreach to a broader investor base; it expects to do so in the next few months,” Marathon said in its filing.

Stringer's access resolution calls for a 3 percent/three year threshold, for up to 25 percent of the Marathon board.

Meanwhile, Exelon Corp. is asking its investors to vote on conflicting management and shareholder access resolutions.

Noble Energy Inc. opposes proxy access, saying that the mechanism under Stringer's eligibility thresholds would create an uneven playing field, increase the company's costs, and significantly disrupt board and corporate operations.

To contact the reporter on this story: Yin Wilczek in Washington at ywilczek@bna.com

To contact the editor responsible for this story: Ryan Tuck at rtuck@bna.com

Bank of America's filing is available at http://www.sec.gov/Archives/edgar/data/70858/000007085815000026/bac0320158k.htm.

The Priceline Group's filing is available at http://www.sec.gov/Archives/edgar/data/1075531/000107553115000015/a8-kamendedbylawsmarch2015.htm.

Marathon Oil's filing is available at http://www.sec.gov/Archives/edgar/data/101778/000104746915002402/a2223594zdef14a.htm.

Exelon's filing is available at http://www.sec.gov/Archives/edgar/data/1109357/000119312515098237/d876808ddef14a.htm.

Noble's filing is available at http://www.sec.gov/Archives/edgar/data/72207/000007220715000014/nbl-2015proxy.htm.