Compliance Clarified: Addressing The New Proxy Access Rules

In passing the Dodd-Frank Act, Congress resolved a long-running debate over whether the Securities and Exchange Commission has the power to adopt requirements that companies give shareholders access to issuers' proxies for the purpose of nominating their own directors. Dodd-Frank gave the SEC r...

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Bibliographic Details
Published inCompliance Reporter
Main Authors Addleman, Kit, Newsome, Bruce, Halloran, Mike
Format Trade Publication Article
LanguageEnglish
Published London Pageant Media 27.09.2010
Subjects
Nominations
Proxy statements
Regulation of financial institutions
SEC proxy rules
Shareholder meetings
Shareholder voting
Stockholders
Wall Street Reform & Consumer Protection Act 2010-US
United States > US
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Summary:In passing the Dodd-Frank Act, Congress resolved a long-running debate over whether the Securities and Exchange Commission has the power to adopt requirements that companies give shareholders access to issuers' proxies for the purpose of nominating their own directors. Dodd-Frank gave the SEC rulemaking authority to require that proxy solicitations by an issuer include board nominees submitted by shareholders, except in certain circumstances. The SEC's new rules require companies to include in their proxy materials the director nominees of certain qualified shareholders. To nominate a director candidate, a shareholder or group of shareholders must have an investment of at least 3% of the voting power of the company and must have maintained this investment continuously for at least three years. The nominating shareholder or group is limited to nominating the greater of one director or 25% of the board's total membership. Shareholder proxy access will have a major impact on a company's approach to this year's proxy process and, in the long term, may affect the board's working relationship as more outsiders are introduced onto the board.
ISSN:1529-5699