October 1, 2009

Parsing the Proxy Access Comment Letters

With the comment letter deadline behind us, the SEC has received over 550 comment letters on its proposed proxy access rules – with more still dribbling in late. This is compared to over 15,000 comment letters submitted on the 2003 proposed proxy access rules, although that rulemaking was the subject of intense “form letter” campaigns (with roughly 14,500 form letters submitted by mostly individuals supporting the proposed rules in 2003). So in essence, the number of “real” comment letters between the first time the SEC proposed proxy access and this most recent third attempt is the same.

Loosely, most of the letters were against proposed Rule 14a-11, while about 110 were “for” it. Even some letters “for” it recommended some tweaks, particularly lengthening the holding requirement to two years from one year and changing the “first in” nomination formula to “largest shareholder.”

Here is a rough breakdown in the views expressed in the first 500 letters (note more letters were submitted since the breakdown was made):

– Public/private companies – 119 letters, nearly all opposed proposed Rule 14a-11 – but a majority supported the proposed amendments to Rule 14a-8(i)(8) subject to further amendments. Law firms/individual lawyers submitted 27 letters that reflected similar sentiments (except the few from plaintiff firms). Most of the 29 letters from trade associations also reflected these views.

– Small businesses/individuals – 241 letters, many of whom opposed the proposed rules because of opposition to increased governmental involvement in business.

– Institutional investors/unions/public pension funds – 52 letters, universally supported the proposed rules except for the Vanguard Group and Carpenters letters.

– Governance service providers/activists – 15 letters, letters submitted by RiskMetrics, Glass Lewis, The Corporate Library, CtW Investment Group and similar service providers supported the proposed rules – while Computershare/Georgeson and the Altman Group each submitted a letter recommending that the SEC first reform the shareholder communications process by eliminating the NOBO/OBO distinction.

– Academics – 8 letters representing 96 academics, most of these letters supported the proposed rules.

Have you seen this Black Eyed Peas’ “Dipdive” video from Oprah’s show? It’s unbelievable. If humans can do this, how come we can’t solve world hunger, etc.?

Posted: 279-page Financial Crisis Manual

Recently, we posted this 279-page Financial Crisis Manual from Davis Polk. This monster is a comprehensive review of financial crisis laws as they apply to US financial institutions, covering the major Federal Reserve programs, Treasury’s capital investments and warrants, the FDIC’s debt guarantees, the public-private investment program, the enforcement landscape and executive compensation. It’s great to have a reference work that gathers all the scattered primary sources of financial crisis laws, regulations and contracts in one place.

How to Prepare for the Upcoming Proxy Season

As could be expected given the expectations for the upcoming proxy season, our “4th Annual Proxy Disclosure Conference” – which will be held at the San Francisco Hilton and via Live Nationwide Video Webcast on November 9th – will be attended by many of you.

This full-day Conference crams a lot of practical disclosure guidance into a single day, with a total of 12 panels, including:

– How the Latest Developments Impact You
– How to Avoid the Conflict between the Lawyer and the Consultant (and HR): Working for Full Disclosure
– Why Disclosures Matter: ‘Real World’ Perspectives
– The SEC Staff Speaks: What to Expect from the Comment Process
– Practice Pointers: How to Implement ‘Say-on-Pay’
– The New Challenges of Bonuses (and Clawbacks)
– How to Handle ‘Out-of-Money’ and Other Down-Market Arrangements
– Dealing with the Complexities of Perks
– Conducting – and Disclosing – Pay Risk Assessments
– The Latest on the CD&A
– Form 8-Ks for Compensation Changes – What to Do

Now that Congress is moving on say-on-pay (and other compensation-changing initiatives), you need to register now to attend our popular conferences and get prepared for a wild proxy season. Remember that the “6th Annual Executive Compensation Conference” (held on 11/10) is paired with the “4th Annual Proxy Disclosure Conference” – so you automatically get to attend both Conferences for the price of one. Here is the agenda for both Conferences.

Act Now: Register now to attend live in San Francisco or by video webcast. If you can’t make these dates, note that both Conferences will be available through a video archive.

– Broc Romanek