March 23, 2011

Say-on-Pay: A Third Failed Vote (and Almost a Fourth)

Yesterday, Shuffle Master filed this Form 8-K to reveal its become the third company this proxy season to fail to achieve a majority vote for say-on-pay as only 45% of shareholders voted in favor (here's the other two). And Hemispherx Biopharma revealed it almost became the fourth with only 51% support as reflected in its Form 8-K.

In his "Proxy Disclosure Blog," Mark Borges gives us the latest say-when-on-pay stats: with 739 companies filing their proxies, 44.3% triennial; 3.4% biennial; 48.8% annual; and 3.4% no recommendation. As Dave blogged a few days ago, the annuals have now passed the triennials...

PCAOB Ramps Up Project to Rethink the Auditor's Report

Yesterday, the PCAOB held a public meeting regarding its project on how best to improve the auditor's report. Here's the press release - and statements from Chair Doty and three other PCAOB board members (and here's related presentation slides from a meeting with the PCAOB Investor Advisory Group last week).

It was a packed house as this project could lead to the most significant changes in reporting by auditors since the 1930's. A concept release is expected this Summer. This project is long coming, and comes on heels of recommendations made in October 2008 by the US Treasury Advisory Committee on the Auditing Profession (recommendations were also made in the 1970's by the "Cohen Commission" but were not fully acted on).

SCOTUS Supports Plaintiff's Bar in Matrixx

Yesterday, the US Supreme Court decided Matrixx Initiatives Inc. v. Siracusano, a case examining whether failure to disclose non-statistically adverse data can give rise to fraud claims. The Court upheld a decision by the Ninth Circuit Court of Appeals, determining that investors stated a claim and adequately pleaded materiality under the federal securities laws. Here's analysis from Kevin LaCroix's "D&O Diary Blog." And we'll be posting memos as they arrive in our "Materiality" Practice Area (such as this Cooley memo, Simpson Thacher memo and this Morrison & Foerster one).

- Broc Romanek