ADVANTAGE PROXY

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No two companies or solicitations are alike.  At Advantage Proxy, we listen to our clients and develop winning pro-active solicitation campaigns designed to meet their objectives.  Our goal is to maximize shareholder voting returns and responses at a reasonable cost.

Recent Proxy Rule Changes

On September 15, 2011 amended Rule 14a-8 was declared effective by the SEC.  The new rule states that any shareholder having held $2,000 in company stock for at least a year would be allowed to propose amending a company’s bylaws to allow shareholder proxy access for director nominations. If approved, the company would have to allow proxy access in the subsequent proxy season.  

On July 22, 2011 The US Court of Appeals for the D.C. Circuit vacated SEC Rule 14a-11, which was the proxy access rule adopted by the SEC in August 2010.  Under rule 14a-11 shareholders would have been able to require public companies to include shareholder nominees in a company’s proxy statement under certain circumstances. The lawsuit did not challenge revised Rule 14a-8 which would allow shareholders to request that companies include in their proxy statements proposed bylaw amendments that would provide for more permissive shareholder proxy access than mandated by Rule 14a-11.  A potential outcome for the 2012 proxy season is that the SEC will adopt a revised version of Rule 14a-8 allowing shareholders to include proxy access bylaw amendments in companies’ proxy statement.  The eligibility requirement under Rule 14a-8 generally requires a shareholder to have held shares with a value of at least $2,000 for at least one year.

The Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law on July 21, 2010.  The Act includes provisions applicable to public companies requiring defined “Say-on-Pay” votes and will have a significant impact on corporate governance and executive compensation practices for public companies.  The mandatory Say-on-Pay and Say-on-Frequency votes are required for all companies subject to the SEC’s proxy rules at a company’s first annual meeting taking place on or after January 21, 2011.  In addition, discretionary voting by brokers on all compensation issues has now been eliminated.

In July 2009 the Securities and Exchange Commission issued an order approving the proposed New York Stock Exchange (NYSE) rule change to amend NYSE Rule 452 and corresponding Listed Company Manual section 402.08 to eliminate broker discretionary voting for the election of directors. Brokers are no longer be allowed to issue the “automatic broker vote” on the election of directors.

In 2007 the SEC adopted amendments to the proxy rules under the Securities Exchange Act of 1934 that provide an alternative method for issuers and other persons to furnish proxy materials to shareholders by posting them on an Internet Web site and providing shareholders with notice of the availability of the proxy materials. This new delivery method, Notice & Access, applies to proxy solicitations by all issuers or other soliciting parties. The only exception is the method may not be used for a solicitation related to a business combination transaction.

These rule changes, coupled with amplified levels of activism by institutional investors and increased scrutiny by voting advisory firms, have changed the face of corporate governance. There is no such thing as a “routine” meeting anymore.

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