This post describes the results produced so far during the 2013 proxy season as a result of the work that the Shareholder Rights Project (SRP) has done on behalf of SRP-represented clients. Thus far, this work has already resulted in the following 2013 outcomes:

• 19 boards of S&P 500 and Fortune 500 companies declassified following the adoption of agreed-upon management proposals at 2013 annual meetings; and
• 13 precatory proposals passed at the 2013 annual meetings of S&P 500 and Fortune 500 companies, with an average support of 78%.

Further details about these results (including lists of all the relevant S&P 500 and Fortune 500 companies) are provided below. We note that these results add to those obtained during 2012 in which the work of the SRP and SRP-represented investors resulted in:

…continue reading: SRP Mid-Proxy-Season Results: 19 Boards Declassified, 13 Precatory Declassification Proposals Passed

As a result of the work of the Shareholder Rights Project (SRP) and SRP-represented investors, declassification proposals will be voted on in April and May 2013 at the annual meetings of 36 S&P 500 and Fortune 500 companies:

• At 28 companies, agreed-upon management proposals to declassify will be brought to a shareholder vote of approval pursuant to agreements entered into with SRP-represented investors;
• At 8 companies, where such agreements have not been reached, precatory proposals that the SRP has submitted on behalf of SRP-represented investors will go to a vote.

These 36 proposals are in addition to 9 proposals that already went to a vote and were approved at annual meetings of S&P 500 and Fortune 500 companies in 2013 (3 management proposals and 6 precatory proposals), as well as the many additional declassification proposals (both agreed-upon management proposals and precatory proposals) that will go to a vote at subsequent annual meetings.

…continue reading: 36 Declassification Proposals Going to a Vote in April and May

In its news alert released yesterday, the Shareholder Rights Project (SRP), working on behalf of eight SRP-represented investors, announced that proposals submitted for 2013 meetings have already had significant impact. As discussed below, major results obtained so far include the following:

• Following active engagement, 46 S&P 500 and Fortune 500 companies that received shareholder proposals for 2013 annual meetings have already agreed to move towards annual elections.
• These 46 companies represent more than 60% of the companies receiving shareholder proposals from SRP-represented investors for the 2013 proxy season.
• Together with the 2012 work of the SRP, 91 companies — about three-quarters of the S&P 500 and Fortune 500 companies that received proposals in 2012, 2013 or both — have agreed to move towards annual elections. The aggregate market capitalization of these 91 companies exceeded one trillion dollars as of March 1, 2013.

…continue reading: Substantial 2013 Results Already Produced by SRP and SRP-Represented Investors

Although the 2013 proxy season is still in its early stages, board declassification proposals submitted by the Shareholder Rights Project (SRP) on behalf of SRP-represented investors have already gone to a vote at the 2013 annual meetings of six S&P 500 and Fortune 500 companies, and these proposals all passed by substantial majorities, receiving average support of 79% of votes cast.

This result continues the strong record of success for SRP-represented investors in 2012, and reflects the on-going strong support for board declassification among institutional investors. The table below provides information concerning these six precatory declassification proposals, all submitted on behalf of the Massachusetts Pension Reserves Investment Management Board (PRIM).

DECLASSIFICATION PROPOSALS GOING TO A VOTE SO FAR IN 2013

…continue reading: Initial 2013 Annual Meeting Results: Six Board Declassification Proposals Passed with Average Support of 79%

In its 2012 Annual Report released today, and in joint press releases issued today with institutional investors it represents, the Shareholder Rights Project (SRP) provided detailed information about the outcomes of its work with SRP-represented investors during 2012, the SRP’s first full year of operations.

As discussed below, major results obtained during 2012 include the following (for complete details on all outcomes see the Annual Report):

• 48 S&P 500 companies (listed here) entering into agreements to move toward declassification;
• 38 successful precatory proposals (listed here), with average support of 82% of votes cast;
• Over 60% of successful precatory proposals by public pension funds and over 30% of all successful precatory proposals; and
• 42 board declassifications (listed here), reducing the number of classified boards among S&P 500 companies by one-third.

Expected Impact by End of 2013: As a result of these outcomes and the ongoing work of the SRP and SRP-represented investors, it is estimated that a majority of the 126 S&P 500 companies that had classified boards at the beginning of 2012 will have moved toward annual elections by the end of 2013.

…continue reading: Large-Scale Governance Reforms in S&P 500 Companies

In joint press releases issued earlier this week, the Shareholder Rights Project (SRP) and each of eight institutional investors it represents announced their collaboration for the 2013 proxy season to encourage 74 S&P 500 and Fortune 500 public companies to move to annual elections. The SRP has submitted shareholder proposals on behalf of the eight SRP-represented investors for a vote at the 2013 annual meetings of 74 S&P 500 and Fortune 500 companies. A list of the 74 companies that received proposals is available here. The proposals urge repeal of the companies’ staggered boards and a move to annual elections.

The SRP and SRP-represented investors have already begun to engage with companies receiving shareholder declassification proposals, and some of the companies receiving shareholder proposals have already agreed to take steps necessary to declassify their boards. It is expected that, as occurred during the 2012 proxy season, the engagement by the SRP and SRP-represented investors will result in negotiated outcomes and moves to annual elections at a large proportion of the 74 companies receiving proposals.

…continue reading: Advancing Board Declassification in the 2013 Proxy Season

According to a recent news alert by the Council of Institutional Investors, 97 precatory proposals have so far received majority support at annual meetings taking place during the first seven months of 2012. As explained below, investors represented by the Shareholder Rights Project (SRP) are responsible for over one-third of the precatory proposals receiving majority support at annual meetings so far this year.

During the 2011-12 proxy season, the SRP has been representing and advising a number of institutional investors in connection with the submission of shareholder proposals. These precatory proposals urge repealing the classified board and moving to annual elections, which are widely viewed as corporate governance best practice.

Thirty-seven proposals submitted by five SRP-represented investors — Illinois State Board of Investment (ISBI), the Los Angeles County Employees Retirement Association (LACERA), the Nathan Cummings Foundation (NCF), the North Carolina State Treasurer (NCDST), and the Ohio Public Employees Retirement System (OPERS) — have already gone to a vote at 2012 annual meetings. These proposals have obtained the support, on average, of 80.89% of votes cast, and thirty-five of the proposals passed. The 35 proposals brought by SRP-represented investors that passed represent 36% of all of the shareholder proposals receiving majority support at annual meetings this year.

…continue reading: SRP-Represented Investors Responsible for 36% of Successful 2012 Shareholder Proposals

Pursuant to SEC rule changes that took effect in September 2011, shareholders are now permitted to submit and vote on “proxy access proposals” – that is, proposals to give shareholders the right to include director nominees in the company’s proxy materials. Over 20 such shareholder proposals (half of which were binding) were submitted during the 2012 proxy season, of which only eight have come to a vote. Many of the proposals that did not come to a vote were deemed excludable from proxy statements by the staff of the SEC for a variety of technical reasons. We have included on the following page a chart of the terms and outcomes of proxy access proposals submitted to date.

The vote results from this limited pool suggest that shareholders are hesitant to approve proposals that would give a proxy access right to holders of a small number of shares, but are more supportive of proposals that have ownership requirements that are similar to the 3%/3-year threshold that would have applied under the SEC’s now-vacated mandatory proxy access rule.

…continue reading: Proxy Access Proposals: Review of 2012 Results and Outlook for 2013

With the current proxy season moving toward its final stage, this post provides an updated report about the outcome of precatory declassification proposals that investors represented by the Shareholder Rights Project (SRP) submitted to S&P 500 companies. At this stage of the proxy season, thirty-three precatory declassification proposals submitted to S&P 500 companies by SRP-represented investors won approval, with an average support of 82% of votes cast. These results, as well as the proposals still expected to go to a vote at other S&P 500 companies this season, are described further below.

As described in detail on the SRP’s website, during the 2011-12 proxy season, the SRP has been representing and advising several institutional investors – including the Illinois State Board of Investment (ISBI), the Los Angeles County Employees Retirement Association (LACERA), the Nathan Cummings Foundation (NCF), the North Carolina State Treasurer (NCDST), and the Ohio Public Employees Retirement System (OPERS) – in connection with the submission of precatory shareholder proposals to more than eighty S&P 500 companies that have classified boards. The proposals urge repealing the classified board and moving to annual elections, which are widely viewed as corporate governance best practice.

Through active engagement with companies receiving declassification proposals, forty-four S&P 500 companies have entered into agreements committing them to bring management proposals to declassify their boards (information about these negotiated outcomes is available here). In many of the companies receiving proposals, however, negotiated outcomes were not forthcoming, and as a result, shareholder proposals submitted by the SRP-represented investors have been going to a vote at a number of annual meetings. In particular, such proposals have already gone to a vote at thirty-five companies.

Of the thirty-five proposals voted on so far, thirty-three passed. The table below provides information concerning the precatory declassification proposals that passed. As the table indicates, these proposals obtained average support of 82.16% of votes cast.

Of the thirty-five shareholder proposals to declassify that went to a vote, only two proposals (detailed here) did not pass. Although these proposals failed to gain majority support, they received an average support of 48.55% of votes cast.

We hope that all or most of the thirty-three companies where declassification proposals passed will follow the strongly expressed preferences of their shareholders and bring management proposals to declassify to a vote at their 2013 annual meeting.

…continue reading: Thirty-Three Declassification Proposals Win Approval with Average Support of 82%

Already at this stage of the current proxy season, seventeen charter amendments declassifying boards of S&P 500 companies have been adopted following agreements entered into with investors represented by the Shareholder Rights Project (SRP). Details about these early results, as well as about the large number of agreed-upon management proposals to declassify expected to go to a vote at other S&P 500 companies later on, are provided below.

As described on the SRP’s website, during the 2011-12 proxy season, the SRP has been representing and advising several institutional investors – Illinois State Board of Investment (ISBI), the Los Angeles County Employees Retirement Association (LACERA), the Nathan Cummings Foundation (NCF), the North Carolina State Treasurer (NCDST), and the Ohio Public Employees Retirement System (OPERS) – in connection with the submission of precatory shareholder proposals to more than eighty S&P 500 companies that have classified boards. The proposals urge repealing the classified board and moving to annual elections, which are widely viewed as corporate governance best practice.

Through active engagement with companies receiving declassification proposals, negotiated outcomes have been obtained with forty-four S&P 500 companies receiving proposals from the SRP-represented investors (about half of the companies receiving such proposals). These forty-four companies have entered into agreements committing them to bring management proposals to declassify their boards. Overall, the forty-four companies that have entered into such agreements represent about one-third of the S&P 500 companies that had staggered boards as of the beginning of this proxy season, and have an aggregate market capitalization that exceeds (as of April 1, 2012) half a trillion dollars.

Of the forty-four agreed-upon management proposals, twenty-three management proposals have already gone to a shareholder vote. Of these twenty-three proposals, seventeen have passed, resulting in declassification of the board. The table below provides information concerning the agreed-upon management proposals that passed. As the table indicates, these proposals obtained average support of 99.08% of votes cast and 81.01% of votes outstanding.

The six management proposals to declassify that did not pass (detailed here) did receive a majority of the votes (95.51% of the votes cast on average, and 67.22% of the votes outstanding on average). However, the proposals did not pass due to the presence of high supermajority requirements.

Agreed-upon management proposals to declassify are expected to go to a vote at other S&P 500 companies later on. A list of such companies that have already made public filings that disclose the planned management proposals is available here.

…continue reading: Seventeen Boards of S&P 500 Companies Already Declassified Following Agreements with SRP-Represented Investors