November 7, 2006

Reminder: New Form 8-K Rules Effective Today!

Remember that any Form 8-Ks with triggering events that occur today – and afterwards – have to comply with the SEC’s new executive compensation rules. We have posted some memos regarding the changed 8-K rules in our “Form 8-K” Practice Area on both and The cover page of the Form 8-K remains the same…

Shareholder Access vs. Majority Voting Standards

Following up on my blog about the shareholder proposal regarding shareholder access recently submitted to Hewlett-Packard, Keith Bishop notes: “I think that it is interesting to compare the situation at Hewlett Packard to companies with majority vote proposals. At Hewlett-Packard’s 2006 annual meeting, its stockholders rejected a majority vote proposal. In opposing that proposal, Hewlett-Packard argued that ‘the plurality voting standard is compatible with HP’s cumulative voting provisions, which allow stockholders to aggregate their votes for a single director nominee, and therefore provide stockholders a meaningful ability to express their preferences in the election of directors.’

In companies like Hewlett Packard, however, cumulative voting is only a potentiality. The reason is the high cost of soliciting proxies. Cumulative voting is only meaningful when there is a contested election. Approval of a stockholder access proposal at Hewlett-Packard’s next meeting therefore could open the door to the actual (as opposed to potential) use of cumulative voting as a means to express stockholder preferences. Majority voting, in contrast, offers only a negative – the potential to cause someone not to be elected. Any vacancy that results from a majority vote rule is filled by appointment and not shareholder election.”

The Board’s Role in Compliance

In this podcast, Maggie Bavuso of Compliance Systems Legal Group provides some insight into how boards should monitor a company’s compliance function, including:

– What has changed board responsibilities relative to compliance programs
– What is the impact of the revised Federal sentencing guidelines on the board’s compliance obligations
– What are the oversight responsibilities that boards now have
– How should a board handle an H-P type of investigation