Most large US public companies are incorporated in Delaware, but not all. You may ask: why did some blue chip companies choose to incorporate in New York rather than Delaware, which has long been favored because of its efficient corporate law structure and renowned courts whose justices are business savvy? Because these companies were formed long before Delaware earned its well-deserved reputation. Long-standing New York companies include General Electric (1892), International Paper (predecessor company incorporated in 1898), Xerox (1906) and IBM (1911).
In many areas, New York law and Delaware law are similar. In fact, New York recently passed two amendments to its business corporations law (signed into law by Gov. Patterson on July 22nd) that will put New York companies on equal footing with their Delaware counterparts in certain areas.
The first amendment – S.7350 / A.10824 – allows companies to move from the default plurality standard for director elections to majority election via a bylaws amendment. Until now, New York companies could only change from a plurality to a majority standard by amending their charters, which requires shareholder approval (and under the SEC’s rules, the filing of preliminary proxy materials). Delaware companies have always been able to easily make this change through a bylaws amendment, which does not require shareholder approval.
The other amendment – S.7349 / A.10825 – allows New York companies to pay dividends out of either surplus or net profits, which is consistent with Delaware law. Previously, New York companies could only pay dividends out of surplus.
I imagine that New York companies are happy that their state legislature is staying on top of issues like this – and these moves are seen as friendly to both companies and their shareholders.
Now Available: RiskMetrics’ Annual Policy Survey
RiskMetrics has opened its annual policy survey to corporate issuers in the United States as well as global institutional investor clients. This year, they desire to gather corporate views earlier in the policy formulation process. The survey questions are nearly identical for both the institutional and issuer surveys – both seeking a broad perspective on the policy topics they’re investigating for the 2009 proxy season, including compensation, board elections, director independence and more.
As in recent years, RiskMetrics will also hold an open comment period in the Fall to solicit specific feedback on their proposed policy changes.
How to Handle Hedge Fund Activism
On DealLawyers.com, we have posted the transcript from our recent popular webcast: “How to Handle Hedge Fund Activism.”
When Will Michael Phelps Be Swimming for His Eight Medals?
Both my boys are competitive swimmers (and my wife used to be) and Kate Ziegler grew up swimming in our neighborhood, so we’re pretty excited about Michael Phelps and Katie Hoff’s upcoming events at the 2008 Beijing Olympics.
However, I had a hard time figuring out when Michael would be swimming when we are on vacation next week – here is what I figured out from this complex NBC Olympic schedule (all gold medal swimming events will be shown live and at night Eastern Time; but it’s unknown when at night they will be swimming):
1. 400 IM – Saturday, 8/9
2. 100 Free Relay – Sunday, 8/10
3. 200 Free – Monday, 8/11
4. 200 Fly – Tuesday, 8/12
5. 200 Free Relay – Tuesday, 8/12
6. 200 IM – Thursday, 8/14
7. 100 Fly – Friday, 8/15
8. 100 Medley Relay – Saturday, 8/16
– Broc Romanek