April 28, 2009
Tabulating Voting Results: Apple Pulls a “Yahoo”
Yesterday, Apple announced that it filed a corrected Form 10-Q to clean up some “human errors” that happened during the course of tabulating voting results from its recent annual shareholders meeting. The reversed error now shows that Apple received a majority vote on a non-binding shareholder proposal that sought to have the company to conduct say-on-pay votes. The company incorrectly counted abstentions as “no” votes. [As an aside, some proxy statements say some strange things about effect of abstentions. But that’s a story for another day.]
Apple initially claimed victory in its initial Form 10-Q filed last week. Now with egg on its face – and in the wake of two consecutive years of a majority vote in favor of doing so – the company says it will place say-on-pay on the ballot next year. The reversal comes on the heels of the tabulation math being examined by Mercury News’ “SiliconBeat” on Friday.
Unfortunately, bad tabulation math happens all too often after annual meetings (eg. last year’s Yahoo meeting). Once again, I urge all those that deal with annual meetings to read this important piece from last Fall’s issue of InvestorRelationships.com: “An Insider’s Perspective: How to Avoid a Yahoo-Like Tabulation Nightmare.” You can get receive it for free – you just need to input some basic contact information.
Voting results have become too important for companies to not have truly independent tabulators (often, a company’s transfer agent serves as the tabulator). And I believe that the SEC should adopt rules requiring companies to file voting results on a Form 8-K within 4 business days of the results being certified (or at least requiring disclosure on a press release or posted on corporate websites within that timeframe).
The existing standard of having shareholders wait until the next Form 10-Q is simply too long – for many of the calendar-year companies that hold their annual meetings in April and May, we won’t see voting results until mid-August. If I make an effort to vote, it’s nice to know the results as soon as possible – it’s a vital part of the voter experience. Think election night.
And clearly people really need to evaluate how they treat tabulation from a disclosure controls and procedures perspective – and make sure the disclosure committee is involved in the process. Don’t just rely on the tabulators if you value your job (not to imply that the tabulators were at fault in Apple; we don’t yet know what the “human error” was)…
Corp Fin Updates Numerous CD&Is
On Friday, Corp Fin updated a bunch of its “Compliance and Disclosure Interpretations,” including some in these categories: ’33 Act Sections; ’33 Act Rules; ’33 Act Forms; ’34 Act Rules; Section 16 Rules & Forms; ’34 Act Forms; Form 8-K; and Regulation S-K. The Staff has marked each of the specific CD&Is that have been updated. I imagine Dave might provide us with analysis about some of these changes when he blogs towards the end of next week.
FINRA’s New Limited Representative Category for Investment Bankers
A few weeks ago, the SEC approved FINRA’s rule change that creates a new limited representative category – Limited Representative-Investment Banking – for persons whose activities are limited to investment banking, including those who work on the equity and debt capital markets and syndicate desks. The new registration category, which has long been requested by the securities industry, permits persons who function solely in the investment banking area to avoid having to pass the Series 7 examination.
– Broc Romanek