Publications

For the second year in a row, the most prevalent governance-related shareholder proposals in 2016 were those that sought to implement proxy access, a mechanism allowing shareholders to nominate directors and have those nominees listed in the company’s proxy statement and on the company’s proxy card.  While the continuing momentum of proxy access proposals is due in part to the submission of 72 such proposals by New York City Comptroller Scott Stringer on behalf of the New York City pension funds he oversees, this year was marked by a meaningful increase in proxy access proposals submitted by individuals as well.  Consistent with last year, the overwhelming majority of proxy access shareholder proposals called for the right of shareholders owning three percent of the company’s outstanding shares for at least three years to nominate directors in the company’s proxy materials.  This year’s proposals, however, have gotten somewhat more sophisticated.  More than half of the proxy access shareholder proposals reaching a vote at Russell 3000 companies capped proxy access nominees at the greater of 25 percent of the board or two directors, as opposed to simply 25 percent, which was almost universal last year.  And, unlike last year, in which most shareholders proposals were silent on aggregation limits, most proxy access proposals submitted to a vote in 2016 specified that an unrestricted number of shareholders may be aggregated to reach the shareholding threshold.