January 26, 2011

SEC Adopts New Say-on-Pay Rules: Our Webcast Covers This Today!

Yesterday, as noted in this press release, the SEC adopted new say-on-pay rules – by a 3-2 vote – and then posted the 152-page adopting release, just in time for today’s webcast – “The Latest Developments: Your Upcoming Proxy Disclosures – What You Need to Do Now!” Mark Borges, Alan Dye, Dave Lynn and Ron Mueller were up to the wee hours analyzing the adopting release and are now prepared to cover how the new rules impact you in practical terms during today’s webcast. Here’s Chair Schapiro’s opening remarks – and remarks from the two dissenting Commissioners: Parades and Casey.

As all memberships expired at the end of the year, please renew if you haven’t yet to catch today’s program. If not yet a member, try a no-risk trial now.

For those wondering how many attend open Commission meetings in person these days, I hear that yesterday’s meeting drew mostly SEC Staffers plus maybe a dozen lawyers and another dozen reporters. It’s pretty remarkable how webcasting the meetings have killed live attendance – a popular topic like SOP would have drawn hundreds in the old days. Personally, I haven’t attended an open meeting at the SEC since they began webcasting them…

Monsanto Shareholders Back Company’s SOP Despite Negative ISS Recommendation – But Significant Number Vote “Against”

Yesterday was the first annual meeting at which a say-on-pay vote was submitted to shareholders under Dodd-Frank. Right after Monsanto held its meeting, it filed its Item 5.07 8-K on the same day. The most noteworthy aspect of the Monsanto vote is that the company’s SOP passed despite a recommendation by ISS against it. However, the company garnered only about two-thirds of the vote in favor – with a third voting against it. This relatively high level of “against” votes should probably be viewed by the company as a warning sign, as mentioned on our earlier say-on-pay webcasts (a notion likely to be repeated by our experts during today’s webcast).

Also noteworthy is that notwithstanding the board’s recommendation that shareholders vote for “triennial,” shareholders selected “annual” – here is how that voting went: 62% for annual; 36% triennial; 1% biennial, and 0.5% abstentions. Even though this vote in non-binding, the company went ahead and disclosed in its Form 8-K that it would implement an annual SOP vote (as also reflected in this press release). However, the company was mum about the potential ramifications of the significant “against” votes on its SOP – understandably so since it may take the company some time to internally process the results (and engage shareholders to better understand why so many “against” votes were cast)…

SEC Proposes New “Accredited Investor” Definition

Yesterday, the SEC also proposed a new “accredited investor” definition – as required by Section 413(a) of Dodd-Frank – that would amend Rules 215(e) and 501(a)(5) under the ’33 Act to revise the net worth standard for natural person accredited investors to exclude the value of their primary residence from the calculation. Here’s the proposing release and press release. Bill Carleton intends to analyze this proposal soon in his blog so check that out…

– Broc Romanek