SEC CONCEPT RELEASE
IMPORTANT ANNOUNCEMENT FOR ALL CLIENTS
By Thomas L. Montrone
September 01, 2010
You are probably already aware that, over the past few years, there
have been dramatic changes in the corporate governance issues that have
made getting shareholder approval of even mundane resolutions more
difficult and more expensive. Contributing to this has been the gradual
shift of retail share ownership into street name. This movement directly
correlates with the decline in retail shareholder voting over the past
decade. Retail shareholders tend to support management and their votes
may be essential to passing a critical proposal. Unfortunately, the
archaic and opaque street voting process in existence today has proven
to be a barrier for many companies trying to stimulate retail
shareholder voting. These votes cannot be audited and the process
usually disenfranchises retail beneficial shareholders and issuers
alike, often without them even being aware of it. The importance of
issuers gaining responsive access to beneficial retail shareholders has
increased with the heightened awareness of investors on issues such as
compensation, option plans and director accountability. This is further
exacerbated with the issuance of the "proxy access" regulations giving
shareholder(s) owning 3% or more of the company’s stock access to the
ballot.
In anticipation of the growing need to fix the current proxy system,
the SEC issued the proxy Concept Release (the "Release") asking for
input on potential changes to this system. Comments from issuers are
critical in the SEC decision-making process. To help issuers focus on
these issues we've composed a review of some of the areas discussed in the Release along with possible comments issuers might consider submitting to the SEC.
CLICK HERE to view the review of the SEC Concept Release.
(NOTE: This document contains 4 pages of information.)