Investors, shareholder groups and unions’ long fight for the right to hold corporate directors accountable through Proxy Access may soon be over as the right to Proxy Access may arrive this month, according to yesterday’s Wall Street Journal, SEC Set to Open Up Proxy Process. See also New York Times, S.E.C. Said to Open Up Proxy Access.
Acording to the WSJ, the SEC is expected to pass a proxy access rule that would give large shareholders – those who own a 3 % stake in a company for at least two years – the right to directly nominate directors on corporate ballots alongside the company’s choices, with the cost being borne by the company. Currently, if shareholders want to propose a slate of directors, they need to pay for the costs of a separate proxy fight.
The SEC is expected to pass the rule 3 to 2, with the two Republican commissioners dissenting, at a meeting scheduled for August 25.
As noted in our post last Friday, July 30, 2010, the passage of the Wall Street Reform and Consumer Protection Act on July 21, 2010 explicitly gave the SEC the authority to issue rules permitting proxy, although it did not compel the SEC to do so.
Also this week, on Tuesday, August 3, 2010, the New York Times wrote an editorial entitled “Putting Investors First,” in which they urged the SEC to issue new Proxy Access rules and thereby “begin to level the playing field in board rooms and gain public trust in the agency’s ability and willingness to carry out financial reform in the best interests of investors.”
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