Review of 2012 Proxy Season: Anticipating 2013

Wilson Sonsini Goodrich & Rosati (WSGR) have done the work of reviewing this year’s proxy season, so I won’t bother. I’m posting a link to their analysis here, primarily so that I can easily find it, if I need it.

Just note my previous post on annual elections. (UNFI Vote: Have We Turned the Corner on Annual Elections?) In my opinion, companies are just wasting money if they bother to fight shareowner proposals to declassify the board. Out of 56 proposals to declassify boards going to a vote, 52 won at least a majority of yes/no votes and that doesn’t include the 48 that agreed to annual elections once contacted by the Shareholder Rights Project at Harvard Law School. In 2013, expect the Project to move down the food chain to mid-caps and small caps.

With regard to proxy access, we’ve already started to see proposals filed this year. See SEC Denies Disney Right to Exclude Proxy Access Proposal. I anticipate going to vote at several companies with a modified USPX type proposal, thresholds of 1% held for 2 years or 50 shareowners with at least $2,000 of stock each, totaling a minimum of 1/2%, held for 1 year.

From the good folks at WSGR:

The 2012 proxy season will likely be remembered as an evolutionary, rather than revolutionary, year at the corporate ballot box. Many of the trends seen in 2011—the first year of mandatory say-on-pay—continued in 2012, with the vast majority of companies again receiving strong support for their compensation programs. As companies look toward 2013, they should continue to refine their understanding of the process that proxy advisory firms use to generate voting recommendations1 and, more generally, take a fresh look at how their disclosures stack up against evolving best practices. On the shareholder proposal front, proxy access proposals met with very limited success, although proponents gained important intelligence about the support for proxy access among institutional shareholders. Voting results on other shareholder proposals were generally consistent with prior years, with governance-related proposals again predominating.  (continue to WSGR post, Reviewing the 2012 Proxy Season and Preparing for 2013)

See also 2012 Proxy Season Review from July and more recent pieces from Deloitte and Dinsmore,

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