During the 2012 proxy season, the SEC staff concurred that a number of high profile shareholder proposals could be excluded from company proxy statements because various key terms in the proposals were not adequately defined or explained within the text of the proposal and supporting statement. See e.g., WellPoint, Inc. (SEIU Master Trust) (avail. Feb. 24, 2012, recon. denied Mar. 27, 2012) (concurring with exclusion of an independent chair proposal that referred to the New York Stock Exchange standard of independence without defining it because “neither shareholders nor the company would be able to determine with any reasonable certainty exactly what actions or measures the proposal requires”); Textron Inc. (avail. Mar. 7, 2012) (arguing that a reference to the Rule 14a-8 eligibility requirements in a proxy access shareholder proposal was vague and indefinite, although the staff ultimately concurred with the exclusion of the shareholder proposal on other grounds); Dell Inc. (avail. Mar. 30, 2012) (concurring with the exclusion of a similar proxy access shareholder proposal because the proposal’s reference to the Rule 14a-8 eligibility requirements was vague and indefinite). While these no-action letters reflected long-standing SEC staff precedent, in the current proxy season, there has continued to be a large number of no-action requests arguing that various terms in shareholder proposals are undefined or vague and therefore excludable under Rule 14a-8(i)(3).

…continue reading: Assessing Vague Shareholder Proposals Under Rule 14a 8(i)(3)

With the arrival of fall, calendar-year companies are gearing up for what promises to be another busy proxy season, preparing for new rules that will impact their disclosures and governance practices, and planning their 2013 board and committee calendars. To assist public companies in these endeavors, we discuss below ten key items for corporate secretaries and in-house counsel to consider.

…continue reading: Key Year-End Considerations for Public Companies

On Friday, October 8, 2010, the SEC and the petitioners jointly filed a proposed briefing schedule for the case before the Court of Appeals. In the filing, the SEC confirmed that it does not expect proxy access to be available for the 2011 proxy season, and instead seeks a court ruling by the summer of 2011, so that if the rules are upheld, they may be used in the 2012 proxy season. The motion stated that the stay “necessarily means that the Commission’s rule changes will not be available for use by shareholders during the 2010-2011 proxy season.”A copy of the motion is available here.

In their joint motion, the parties proposed to the court that the case be briefed in November through February, with the petitioners’ brief due on November 30, 2010 and the SEC’s brief due on January 19, 2011. Oral argument would be expected in March or April under this schedule, with a decision by the summer. The schedule is subject to approval by the Court of Appeals.

…continue reading: Proxy Access Litigation and Next Steps

On November 25, 2009, the Securities and Exchange Commission (“SEC”) approved amendments to the corporate governance listing standards of the New York Stock Exchange (“NYSE”). The changes will take effect on January 1, 2010.

As discussed in more detail below, the amendments, which the SEC approved in the form proposed in the NYSE’s original release: (1) codify certain staff interpretations, (2) clarify various disclosure requirements, and (3) incorporate applicable SEC disclosure requirements into the NYSE listing standards. Because most of the amendments conform the NYSE listing standards to existing SEC rules, or are of a clarifying or updating nature, they should necessitate only minimal changes to a listed company’s governance practices and disclosures. The most significant change is the new requirement that companies notify the NYSE in writing after any executive officer becomes aware of “any” non-compliance with the corporate governance listing standards, rather than any “material” non-compliance, as currently required.

The SEC release approving the NYSE amendments can be found here. The NYSE filing outlining the proposed amendments includes a mark-up showing the proposed changes to the text of the corporate governance listing standards.

…continue reading: SEC Approves Amendments to NYSE Corporate Governance Listing Standards