In its long-awaited FAQs, ISS indicates that it will generally recommend in favor of management and shareholder proposals for proxy access which allow for nominations to be made by shareholders owning not more than 3% of the voting power for 3 years, with “minimal” or no limits on the number of shareholders permitted to form a nominating group, and allowing nominations for up to 25% of the board.
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Glass Lewis
Subscribe to Glass Lewis RSS FeedGlass Lewis Summarizes its Approach to Proxy Access Proposals
According to Glass Lewis, approximately 100 companies will face proxy access shareholder proposals in 2015. In a blog post, Glass Lewis announced that it will continue to review each shareholder proposal, along with the company’s response, on a case-by-case basis. They believe that proxy access rights will be “rarely invoked and even more rarely successful.”
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SEC Announces Its Examination Office will Review Proxy Advisory Firm Recommendations and Disclosure
The SEC announced its Office of Compliance Inspections and Examinations’ (OCIE) priorities for 2015, which focus on three areas: protecting retail investors, especially those saving for or in retirement; assessing market-wide risks; and using data analytics to identify signs of potential illegal activity. OCIE’s focus is on issues involving investment advisers, broker-dealers and transfer agents.
In a bit of a surprise, there is also a reference under “Other” initiatives to examining proxy advisory firms and the investors that use their voting recommendations, as follows: “We will examine select proxy advisory service firms, including how they make recommendations on proxy voting and how they disclose and mitigate potential conflicts of interest.
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ISS and Glass Lewis Policy Updates for 2015 Proxy Season
In preparation for the 2015 proxy season, companies should be aware of the updates to the policies that govern how the two influential proxy advisory firms, ISS and Glass Lewis, will be advising shareholders on significant ballot items, including governance, compensation and environmental and social matters. Davis Polk’s memo on the these changes is here.
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Proxy Advisory Firms Issue Policy Updates for 2015 Proxy Season
Both ISS and Glass Lewis have released their policy updates for the 2015 proxy season, with new guidelines for board adoption of bylaws, IPO companies, independent chair shareholder proposals, and equity plans seeking shareholder approval, among others.
We will be providing a client memo with more information shortly.
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Will Congress Act to Rein in Proxy Advisory Firms?
Congressman Patrick McHenry (R-NC) indicated that Congress will step in if the SEC fails to act to curb investors’ reliance on proxy advisory firms, in his keynote speech at a panel discussion hosted by the American Enterprise Institute. He stated that the issue of proxy advisory firms is of significant interest to himself and his colleagues, Representative Jeb Hensarling (R-Texas), House Financial Services Chairman, and Representative Scott Garrett (R-NJ), Chairman of the Subcommittee on Capital Markets and Government Sponsored Enterprises.
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SEC Announces Agenda and Panelists for Roundtable on Proxy Advisory Services
The SEC has announced its agenda and panelists for the roundtable on proxy advisory services to be held on December 5 at 9:30 a.m. EST. The event will be webcast live as well as archived.
The roundtable will be divided into two sessions, with the first session focused on the current use of proxy advisory services, including the factors that may have contributed to their use, the purposes and effects of using the services, and competition in the marketplace for such services.
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