March 17, 2009

BofA’s Dueling “Say-on-Pay” Proposals

Recently, Bank of America filed preliminary proxy statement that includes BOTH a management proposal on say-on-pay and a shareholder proposal on say-on-pay (from Kenneth Steiner, whose agent is John Chevedden). The management proposal is an actual vote, while the shareholder proposal is merely a non-binding vote regarding whether the company should have a policy requiring an annual pay vote.

BofA had tried to exclude this proposal through the no-action letter process, arguing that it (1) conflicts with management’s proposal and (2) the company has substantially implemented the shareholder proposal by including the management proposal. The proponent won the day with his argument that the two proposals are not the same because management’s proposal is limited to the period of time that the company is in TARP, while his proposal is unlimited as to duration. Yesterday, Corp Fin posted its response, not permitting BofA to exclude the proposal on either ground (they did waive the 80-day advance requirement).

I think dueling “say-on-pay” proposals will be confusing to shareholders – and I certainly hope this won’t be a new trend. Over the past month, most proponents withdrew their “say-on-pay” proposals once management included their own; this position by the Staff may cause them to reconsider going forward…

Transcript Posted: “Say-on-Pay: A Primer for TARP Companies”

Due to popular demand, we decided to prepare a cleaned-up transcript of the recent webcast – “Say-on-Pay: A Primer for TARP Companies” – and have posted it in our “Say-on-Pay” Practice Area.

Our next webcast is scheduled for next Tuesday – “Compensation Arrangements in a Down Market.” And once new Treasury regulations come out, we can hold our postponed webcast: “New Treasury Regulations and the American Recovery Act: Executive Compensation Restrictions.” As soon as the new regs come out, we’ll calendar a date pronto for that webcast…

Raising Equity Capital in a Turbulent Market

Tune in tomorrow for our webcast – “Raising Equity Capital in a Turbulent Market” – to hear Dave Lynn, John Newell of Goodwin Procter and Lora Blum of Jones Day discuss how companies are using alternative methods to raise capital these days (egs. registered directs, “at-the-market,” etc.).

Thanks to Jay Brown for his note about the passing of the SEC’s Associate General Counsel Diane Sanger. She was truly unique and will be sorely missed.

– Broc Romanek