TheCorporateCounsel.net

Yesterday, a group of pension plans held a press conference to object to the SEC’s director nomination proposal – the one that is supposed to be voted on by the Commission next Wednesday!

As reported today by the New York Times, the SEC’s proposal will involve a two-year process. In the first year, a triggering event – such as a sizable percentage of shareholders that abstain or withhold votes for nominees – would have to occur. In the second year, a contested election could take place, with candidates selected by the board running against shareholder candidates (one to three candidates depending on the board’s size). The shareholder candidates would have to certify that they have no conflicts of interest nor financial relationship/special ties to the investors that nominated them.

The pension plan press conference comes a few days after the Business Roundtable sent a letter to the SEC urging that the Commission study the related issues further before it takes action.

My initial reaction to this extraordinary level of pre-proposal activity is that institutional investors truly are getting their act together. Undoubtably, this exercise in lobbying the SEC will strengthen their relationships and communication channels – so that when it comes time to act as a group to meet any ownership thresholds imposed by this rulemaking, it will not be as difficult to accomplish as it might have been a year ago.

Meanwhile, from the company perspective, it will be difficult for management to get its act together to impact this rulemaking. Aside from the ASCS, ABA and BRT, many of the other associations whose members are impacted by this rulemaking think of lobbying the SEC as a sideline; not a primary mission. Another factor is that this rulemaking most directly impacts CEOs and directors; not CFOs, controllers and lawyers (which are the professions more accustomed to lobbying the SEC). CEOs tend to lobby in groups broken out by industry – and directors normally do not lobby in their roles as directors (as being a director typically is not a primary job).

Convertible Debt Offerings – “Happy Meals” and More

For TheCorporateCounsel.net subscribers, we have posted the transcript for last week’s “New Twists in Convertible Debt Offerings.” Personally, I learned a lot, including why a convert offering coupled with an issuer’s repurchase program is called a “Happy Meal” (answer – everyone goes home happy).

We have also posted an interview with Walter Van Dorn of Thatcher Proffitt on Internal Controls for Non-US Companies .