TheCorporateCounsel.net

As the SEC pushes every association known to humankind to make a big deal of their new “Proxy Matters Spotlight” page, some companies are trying novel ways to alert shareholders to the change in the NYSE’s Rule 452. For example, Boeing just filed this preliminary additional soliciting material consisting of a card notifying shareholders of the recent change in the ability of brokers to vote in director elections. This card is being sent in advance of the proxy materials. [And as a Boeing shareholder I received an email about this letter a few days ago from Schwab (probably written by Broadridge and not Boeing); a follow-up blog is warranted regarding the deficiencies of that email. Coming soon.]

Boeing’s shareholder letter is a noble effort – but I still think bigger measures are gonna be needed to increase voting levels (as I’ve blogged before). Thanks to Kevin O’Neil of Vorys for bringing the Boeing notice to my attention.

Congrats to local Sandra Bullock for her “The Blind Side” Oscar. My family has experienced something similar to that movie’s theme over the past year. We welcomed a 21-year old Sudanese man – Deng – into our home (along with another family up the street) and his English has improved remarkably. And he passed his citizenship test last week. It’s been one of the most rewarding experiences of my life. Here is Deng giving remarks at a surprise party his extended family held for him.

Corporate Governance Trends: Survey Results

Recently, Shearman & Sterling released its annual survey on corporate governance practices of the 100 largest US public companies. Among the trends described in the survey are:

– In the past three years, more than half of the Top 100 Companies have abandoned the plurality voting standard for director elections in favor of a majority voting standard, with 75 of the Top 100 Companies now with a majority voting standard in place.
– The number of companies that have separate people serving as CEO and chairman of the board continues to rise, increasing from 28 to 31 from 2008 to 2009. While 75 of the Top 100 Companies address the topic of whether the two offices should be separated, only 7 of those companies have adopted an explicit policy of splitting the two offices. And of the Top 100 Companies, 69 still have their CEO also serving as chairman of the board.
– With the increased complexity of board membership and decision-making, companies continue to limit the number of outside boards a director may serve on. For the second year in a row, 92% of companies addressed the issue of outside board membership, way up from just 76% in 2004.
– In 2009, 55 of the Top 100 Companies included governance-related shareholder proposals in their proxy statements.
– Of the Top 100 Companies, only 10 have a shareholder rights plan or “poison pill,” down from 33 just five years ago.
– E-proxy notification continues to gain in popularity. Fifty-seven of the Top 100 Companies now use an e-proxy “notice-and-access model,” way up from 35 just a year ago.
– Say-on-pay proposals were presented at 44 of the Top 100 Companies and at over 100 other US public companies. The proposals were approved at 8 of the Top 100 Companies and received majority approval at approximately 10 other US public companies.
– The number of Top 100 Companies that publicly disclosed that they maintain a “clawback policy” has significantly increased over the last three years―35 companies in 2007, 50 in 2008 and 56 in 2009. An additional five Top 100 Companies have disclosed that they have adopted clawback polices that became effective in 2009.

More on our “Proxy Season Blog”

With the proxy season in full gear, we are posting new items regularly on our “Proxy Season Blog” for TheCorporateCounsel.net members. Members can sign up to get that blog pushed out to them via email whenever there is a new entry by simply inputting their email address on the left side of that blog. Here are some of the latest entries:

– More on “Diversity Policies: Do You Need One? Samples Available”
– Delaware Law: How to Count Abstentions and Broker Non-Votes
– Proxy Access: Seven Law Firms Comment on “Opt-Out”
– Survey: Number of Investors Holding 1% of a Company’s Stock
– Suing for Attorney Fees: Causing Company to Add Proxy Disclosure
– RiskMetrics Group Releases 2010 Proxy Season Watchlist

– Broc Romanek