Thanks to a “heads up” from a Society of Corporate Secretaries alert, here is some information about an ISS policy aimed at preventing the sharing of ISS reports. Here is the notice received from ISS by larger companies:
As many of you are aware, ISS allows companies to access the ISS proxy analysis on their specific company free of charge through an online platform, called Governance Analytics. If you do not already have a log in, you can request one.
You may also be aware that in the case of large cap companies (SP500), ISS will provide a draft of its proxy analysis for the purpose of fact-checking prior to publishing its final analysis and recommendations for institutional investor clients. ISS encourages companies to review the draft analysis thoroughly and to consult with their advisors where necessary to ensure accuracy of company-specific data in the report. Draft analyses can be shared with advisors as appropriate.
This year, in response to increasing unauthorized sharing of login credentials and copies of final proxy analyses (which are protected by copyright), ISS began explicitly prohibiting companies from sharing database login credentials and copies of their final proxy analyses with corporate advisory firms. ISS proxy analyses are the work product of ISS and are protected by copyright. Advisory firms wishing to access ISS analyses or various governance databases can do so by subscribing through ISS Corporate Services (ICS).
And as noted by Davis Polk’s Ning Chiu in this blog, companies can now obtain their ISS QuickScores via ISS’ data verification site. QuickScores will also be provided on ISS proxy research reports – and beginning the second week of March, on Yahoo! Finance pages.
2nd & 3rd Say-on-Pay Failure of the Year
As noted in this Form 8-K, Digital Generation failed to gain majority support for its say-on-pay with only 39% voting in favor (hat tip to Karla Bos of ING Funds) – and and as noted in this Form 8-K, Nuance Communications also failed to gain majority support for its say-on-pay (hat tip to Jim Kroll of Towers Watson).
Poll Results: How Many Companies Will Receive a “Failed” Say-on-Pay Vote in ’13?
Here are poll results in which readers predicted the number of say-on-pay votes that fail to garner majority support this year (here are results of last year’s predictions):
I just posted a “Quick Survey on Separating 401(k) Summary Plan Descriptions & Prospectuses” and what folks are doing in the wake of potential securities law liability for ERISA plan fiduciaries where a 401(k) Plan that offers a “Company Stock Fund” investment choice incorporates SEC filings by reference (and the filings later turn out to be inaccurate). Please participate – all responses are anonymous.
Last week, SEC Commissioner Troy Paredes – whose term expires in June – delivered this interesting speech about the need to reform the SEC’s disclosure framework. A lot of good stuff in there. Much of it has been said before (Troy himself gave a speech on the same topic a few years back – and remember the dead-soon-after-conceived “21st Century Disclosure” project) – but it’s important to keep the eye on the ball and recognize the world has changed, but that the way disclosures are made has not all that much (despite the forceful period of change we have been through the past decade). Here is my ten cents off literally off the top of my head:
– Hard to live in DC right now and not think about “sequester, sequester, sequester.” Which leads to my point of how will the SEC have the horses to do something of this magnitude given its resource level, lack of support from Congress, way-behind rulemakings and larger priorities (see this farewell speech by OIA Director Ethiopis Tafara about conflicts between market participants).
– Although I agree that more disclosure is not always better than less, the beauty of the Web is that fulsome disclosure can always be posted online and then investors can decide which disclosures are the most meaningful for them.
– It will be hard to convince companies to pare down sections such as “Risk Factors,” since SEC filings principally remain compliance documents. The linchpin of reducing volume is how does one devise a framework that continues to protect companies that make less disclosure?
– Of course, the biggest challenge is how to address the need to draw out more meaningful disclosures – forward-looking ones – in this era of increasing proxy disclosure litigation. Good luck with that.
– Disclosure lawyers are supposed to be experts in disclosure; yet few even know what “usability” means. That has to change and fast.
– The SEC has to look in the mirror first. Too many rules – and guidance – are not written in plain English. And the easiest fix is to tweak Edgar – change the labels for filings so they match what they are rather than the ancient symbols still used (eg. DEF 14A – what does that mean to the average investor?).
Coming Soon: SEC Staff Paper on Accounting Disclosures & Disclosure Roundtable
Among detailed notes from the accounting panels during PLI’s recent “SEC Speaks” conference, here’s an excerpt from Edith Orenstein in FEI’s “Financial Reporting Blog”:
During a lively panel on Day 2 of PLI’s “SEC Speaks” conference, SEC Chief Accountant Paul Beswick announced that a Staff Paper on Disclosures is expected in the “next couple of months” and a related Disclosure Roundtable is expected to be held in the “late spring or early summer.”
Forward-Looking Disclosures and the ‘Dividing Line’ Between MD&A and Footnotes
Beswick noted that in the past few years, the FASB has been working on three projects relating to disclosures:
Beswick explained that the SEC staff is working on a paper about “what is the dividing line;” e.g., he said, “One of the things we are looking at is: [feedback saying that] “you are pulling too much forward- looking information from MD&A into disclosures.” He added, “We think the paper is important because we think you need a level set [of information].”
“I am hopeful the staff paper will be out in the next couple months,” said Beswick, “with the goal of having the disclosure roundtable in the late spring or early summer.”
As previously referenced by Beswick at the Dec. 2012 AICPA National Conference on Current SEC and PCAOB Developments, the topic of disclosures involves not only geography within the entire “financial reporting package” but also legal liability, auditor/auditing considerations, and the “disclosure framework” generally (a project the FASB is currently working on); therefore, the SEC will engage with the FASB and PCAOB on this project as well.
Transcript: “Activist Profiles and Playbooks”
We have posted the DealLawyers.com transcript of our recent webcast: “Activist Profiles and Playbooks.”
Here’s news from Davis Polk’s Ning Chiu from this blog:
New York State Comptroller Thomas DiNapoli on Friday issued a press release announcing that the New York State Common Retirement Fund has withdrawn the lawsuit it filed in early January against Qualcomm over political spending disclosure, after Qualcomm implemented and publicly posted what the release calls an “industry-leading” Political Contributions and Expenditure Policy. The lawsuit, which we previously discussed, sought Qualcomm’s books and records under Section 220 of the Delaware corporation law.
The press release includes statements from both Qualcomm’s CEO and Chairman and Mr. DiNapoli extolling the importance of increased transparency about corporate political spending. According to the release, the company’s policy will include information on contributions to political candidates and parties, and expenditures to trade associations and Section 501(c)(4) organizations, as well as contributions to influence ballot measures. 501(c)(4) groups, whose primary purpose must be focused on “social welfare” in order to stay tax-exempt, have come under increasing attention for their involvement in the political process while being able to maintain donor anonymity.
The Center for Political Accountability weighed in and in the same release announced that the Qualcomm disclosure “puts it near the top” of its CPA-Zicklin Index, which we described here. According to the CPA, 107 large public companies have agreed to disclose corporate political spending so far.
The 4-page Qualcomm policy indicates that political expenditures require the approval of certain members of management and oversight by the board’s governance committee. The company plans to update the policy twice a year for information on specific political contributions, dues to U.S.-based trade associations that received payments of at least $25,000 (and the portion of those dues and special assessments that were used for activities that are not deductible if such information is available after making reasonable efforts), payments of $10,000 or more to social welfare organizations, and contributions to influence the outcome of ballot measures. The policy states that the company does not plan to make independent expenditures on behalf of federal candidates.
While some had expected a decrease post-election, ISS reported that, like last year, it is tracking more than 110 shareholder proposals on the topic this season.
Is a Guy on a Couch Commenting on Your Defective Auditor Consents?
Just received this important lesson learned from a member:
There is a guy who is reviewing 10-K auditor’s consents and sending emails to the CEO and CFO pointing out deficiencies (wrong date, unsigned) within 30 minutes of the 10-Ks hitting EDGAR. I have had a couple clients receive these emails in the past week and based on the slew of 10-K/As filed in the last week to correct the same sort of deficiencies, I have to imagine he is sending them to other companies too.
I think it’s a good lesson that someone actually reads these things and outside counsel often does not review the final auditor’s consent – but a mistake can be problematic. Although an 8-K can work to get a corrected Exhibit 23 on file I understand the SEC prefers a 10-K/A (which can be exhibits only but still requires SOX certifications). Not sure what his motivation is for these emails but the fact that someone is reading these consents so closely and quickly is an eye-opener.
It is also worth noting that, while all the reports on the recent lawsuit against Apple’s proxy statement in the Southern District of New York focused on the unbundling claim made by Greenlight for the charter amendment proposal, as we previously discussed, little known is that the judge in that case also dismissed efforts by another plaintiff to enjoin the say-on-pay proposal. That plaintiff had claimed that Apple’s use of terms like “experiences,” “input” and “peer group data,” when describing the compensation committee’s judgment in granting long-term equity, failed to provide sufficient information. The judge found, however, that since the plaintiff did not identify any material omission in the proxy and since the compensation discussion and analysis section included in the proxy statement was compliant with the SEC rules, the plaintiff was unlikely to succeed on the merits.
Nonetheless, the Symantec and, in the say-on-pay preliminary injunction context, Apple successes do not mean that U.S. public companies should relax and assume that the plaintiffs’ bar will be deterred. At least one law firm that has been particularly active in filing these types of lawsuits has recently identified several more companies which it is investigating for potential breaches of directors’ fiduciary duties in connection with say-on-pay proposals. Given that the proxy season is upon us, we continue to recommend that companies pay extra attention to their executive compensation disclosure.
In a very important development in the current proxy disclosure litigation wars relating to annual meeting votes, last Thursday the Santa Clara County Superior Court sustained Symantec Corporation’s demurrer in Natalie Gordon vs. Symantec Corporation dismissing a shareholder lawsuit which had sought declaratory relief and damages against Symantec and its directors based on allegations that the directors had breached their fiduciary duties by failing to provide adequate disclosure to shareholders regarding Symantec’s say-on-pay vote in the company’s August 2012 proxy. (For background on the annual vote proxy disclosure litigation cases, see my recent post and Latham’s commentary.)
While the court’s earlier denial of the plaintiff’s motion to preliminarily enjoin Symantec’s annual say-on-pay vote (in October 2012) was welcome and important news to public companies and their advisors (especially since the same court had previously granted a shareholder’s motion to preliminarily enjoin an equity plan approval vote in Stephen Knee v. Brocade Communications Systems), as a decision on the merits, the court’s Thursday decision will be even more valuable than the injunction denial decision to companies in defending proxy disclosure lawsuits.
In its Symantec complaint, the plaintiff alleged on behalf of shareholders as a class that Symantec’s directors had breached their fiduciary duties to shareholders by failing to provide adequate disclosure in support of the company’s say-on-pay vote proposal, pointing to eight alleged deficiencies. Among the eight alleged deficiencies (proving that no good deed goes unpunished, no matter how well trumpeted) were that Symantec had failed to disclose how the board had determined to shift its executive officer pay targeting from 65th to 50th percentile of its peer group and how it had determined to increase officer ownership guidelines and implement a requirement that officers hold at least 50 percent of their after-tax equity grants.
After dispensing with some procedural issues, the court recited the applicable legal standards governing the adequacy of proxy disclosures, namely that directors have a duty to fully and fairly disclose all material information within their control when seeking shareholder action, and that information is material if there is a substantial likelihood that that a reasonable shareholder would view it as significantly altering the “total mix” of information if it were to be made available. The court then applied these standards to each of the alleged deficiencies and concluded that the additional disclosures sought by the plaintiff were not material in view of all of the other information in the proxy, and that the plaintiff had failed to state a cause of action. The court gave the plaintiff ten days leave to amend the complaint to attempt to state a cause of action.
Jim’s analysis of the possible implications of this development are at the bottom of this blog. Here’s the court correspondence since inception (relates to annual meeting from last year).
Off & Running: 1st Say-on-Pay Failure of the Year
As I blogged on CompensationStandards.com’s “The Advisors’ Blog” last week, as noted in its Form 8-K, Navistar International is the first company holding its annual meeting in 2013 to fail to gain majority support for its say-on-pay with only 17% voting in favor since abstentions count as “against.” Lower than anything we saw last year, although perhaps not surprising since nearly 50% of Navistar is held by just 3 investors, including Carl Icahn, who has blasted them for poor governance. Hat tip to Karla Bos of ING Funds for pointing this out!
Transcript: “Rule 10b5-1 Plans Under Attack: The Latest Practices”
We have posted the transcript for our recent webcast: “Rule 10b5-1 Plans Under Attack: The Latest Practices.” This topic clearly has touched the nerves of many members. Here is a note from one such member: “Trades under 10b5-1 plans are by definition structured – and not ad hoc, random trades – and thus the correct comparison is not to market performance generally, but to similar types of structured trades. For example, limit orders are likely to perform better than the market generally because the trade occurs only if the target is achieved. And the absence of trades is due to the fact that the target was not achieved. Those are never reflected because by definition they do not occur.”
Last week, the Financial Times ran a special supplement in honor of its 125th anniversary and they duplicated their front page from February 13, 1888. (I magnified the font size and it’s still hard to read; no wonder everybody wore bifocals.) On this ancient front page, there’s a letter to the editor in which a disgruntled shareholder of the Metropolitan District Railway gripes about the “most depressing character” of the company’s six-month results and calls for the shareholders to oppose the re-election of the chairman and all board members, demand the resignation of all directors and managers, and call a special shareholders meeting to appoint a special investigative committee. Just goes to show you there is nothing new in the world of shareholder feistiness!
In addition, check out the notice in the last column about some guy who disavows his involvement with a certain prospectus. That is why the Securities Act requires signatures and consents. Also, there were a disturbing number of notices under “Latest Shipping News” about shipwrecks and the like. Harrowing times back then.
Wanna Make a Bundle? Read Some Corp Fin Comment Letters!
Interesting Bloomberg article that claims that a short seller named Muddy Waters made a mint – and caused $7 billion in losses for Chinese stocks – by simply reading through comment letters Corp Fin had uploaded to Edgar. Hat tip to Lois Yurow for pointing this out!
Screening Existing Directors for Independence
In this podcast, John DiRocco of Sunoco provides some practical guidance about how to screen existing directors for independence issues, including:
– How often should companies screen existing directors for independence conflicts?
– How should the screening be performed (oral, written, etc.)?
– What types of circumstances indicate that there should be follow-up diligence?
– How much time does a typical screening take?
– Any practical tips on how to screen?
Yesterday, Corp Fin posted this useful guide that foreign private issuers can use to determine how to access the US capital markets.
SEC Chair Walter on Sophisticated Technology
A few days ago, SEC Chair Elisse Walter delivered this speech on technology. This was not a social media speech – in fact, “social media” was not mentioned. Rather, it was a speech about sophisticated technologies with numerous acronyms (along with explanations of what they meant), all of which I didn’t recognize. See if you do:
– MIDAS
– CAT
– Reg SCI
– ARP
– API
– TCR
– ABAP
Meanwhile, this Washington Post article notes that Chair Walter is pressing forward even though Mary Jo White is on deck. Chair Walter delivered this testimony to Congress last week on the SEC’s state of affairs. And Commissioner Luis Aguilar delivered this speech yesterday on proxy disclosure…
Harriet Pearson on Sen. Rockefeller’s Cybersecurity Approach
In this podcast, Harriet Pearson of Hogan Lovells provides analysis into Sen. Rockefeller’s survey of corporate responses to his cybersecurity questionnaire and the overall challenges in this area (check out the “Chronicle of Data Protection Blog” that Harriet contributes to), including:
– Why is cybersecurity a hot topic for lawyers now, and not just IT?
– Tell us a little bit about yourself and your practice. In particular, about your experience at IBM and how that’s relevant to cybersecurity.
– Senator Rockefeller recently published a report on his interactions with the CEOs of a number of US companies on cybersecurity. What did he – and they – say, and what’s the significance of that?
– What is driving Rockefeller?
– So it seems that concern about this issue on the part of Senator Rockefeller, the President, the SEC and others, will not go away. Do you agree? Where is cyber-security on the policy curve for legislation and regulation?
– What about the SEC? How is that regulator looking at this set of risks?
– Since it’s not going away as a policy and political issue, what do you recommend companies do to manage the risk back at their companies?
Gunster’s Robert White blogs about how cybersecurity legislation continues to move forward…and this time perhaps without resistance from the Fortune 500. And there is this Executive Order from President Obama last week for government and companies to jointly create a framework to share information on cyberattacks for critical infrastructure.
Here are survey results on how companies use rules of conduct for their board meetings and annual meetings:
1. At our company, we:
– Have formally adopted Robert’s Rules of Order for all Board and Board committee meetings – 3%
– Sometimes use Robert’s Rules of Order for Board and Board committee meetings – 6%
– Reject the idea of adopting Robert’s Rules of Order for Board and Board committee meetings – 18%
– Have not considered adopting Robert’s Rules of Order for Board and Board committee meetings – 72%
2. At our company, we:
– Have formally adopted Robert’s Rules of Order for all annual shareholder meetings – 3%
– Sometimes use Robert’s Rules of Order for annual shareholder meetings – 12%
– Reject the idea of adopting Robert’s Rules of Order for annual shareholder meetings – 16%
– Have not considered adopting Robert’s Rules of Order for annual shareholder meetings – 69%
3. When we use Robert’s Rules of Order for a shareholder meeting, our parliamentarian typically is:
– Board Chair – 25%
– General Counsel – 58%
– Other in-house lawyer – 8%
– Corporate Secretary (if different than above) – 0%
– Someone else within the company – 8%
– Someone else outside the company – 0%
In our “Q&A Forum,” we have blown by query #7500 (although the “real” number is much higher since many of the queries have others piggy-backed on them). I know this is patting ourselves on the back, but it’s nearly ten years of sharing expert knowledge and is quite a resource. Combined with the Q&A Forums on our other sites, there have been nearly 25,000 questions answered.
You are reminded that we welcome your own input into any query you see. And remember there is no need to identify yourself if you are inclined to remain anonymous when you post a reply (or a question). And of course, remember the disclaimer that you need to conduct your own analysis and that any answers don’t contain legal advice.
Pledging & Hedging: Sample Insider Trading Policy Language
We suggest inclusion of the language below in insider trading policies as a possible response to the new ISS voting guidelines for pledging and hedging. Companies will need to decide whether to narrow the language to just “executive” officers (ISS uses the term “executives”) and whether to define “significant” (ISS does not). Also, a few companies already prohibit all pledging, and not just significant pledging, and companies may want to consider that approach as well, although we view that approach as a bit harsh.
Board members and officers are prohibited from, directly or indirectly, [pledging and hedging any of the Company’s equity securities] [(1) pledging a significant number of the Company’s equity securities, or (2) hedging with respect to any of the Company’s equity securities]. For these purposes, [(a)] “pledging” includes the intentional creation of any form of pledge, security interest, deposit, lien or other hypothecation, including the holding of shares in a margin account, that entitles a third-party to foreclose against, or otherwise sell, any equity securities, whether with or without notice, consent, default or otherwise, but does not include either the involuntary imposition of liens, such as tax liens or liens arising from legal proceedings, or customary purchase and sale agreements, such as Rule 10b5-1 plans[, and (2) “significant” means [the lesser of] 1% of the Company’s outstanding equity securities [and 50% of the equity securities of the Company owned by the board member or officer]]. Also for these purposes, “hedging” includes any instrument or transaction, including put options and forward-sale contracts, through which the board member or officer offsets or reduces exposure to the risk of price fluctuations in a corresponding equity security.
“Equity securities” include common stock, voting preferred stock and options and other securities exercisable for, or convertible into, settled in, or measured by reference to, any other equity security determined on an as-exercised and as-converted basis.
The equity securities attributable to a board member or officer for these purposes shall include equity securities attributable to the board member or officer under either Section 13 or Section 16 of the Securities Exchange Act of 1934. [Equity securities that are pledged shall not be counted toward board member and officer ownership requirements.]
Good grief. The sequestration takes effect a week from this Friday – March 1st – and Congress is on a lengthy break. So it looks quite possible that it won’t be averted this time. As noted in this Reuters article, the automatic budget cuts could affect not only the SEC and CFTC, but also the PCAOB even though it is a self-funded non-profit that doesn’t rely on Congressional appropriations. More to come as the sequestration becomes “real”…
SEC Approves the PCAOB’s Budget
Last week, the SEC approved the PCAOB’s budget of $245.6 million (8% more than last year) – funded primarily by an accounting support fee of $234 million. Here are remarks from Chair Walter and Commissioner Aquilar. In his remarks, Commissioner Gallagher notes that it’s possible for the SEC to approve the PCAOB’s budget in private (but that he is glad that the SEC doesn’t do that).
Auditors Under Scrutiny Get More Serious About Internal Controls
Apparently, when the PCAOB complains about the quality of auditors’ review of internal controls (see News Brief dated 12/10/12, where the PCAOB found problems in connection with audits of internal control in 22% of the cases inspected), the auditors take heed and put the heat on their company clients, at least according to this article in Compliance Week. It appears that auditors are, in fact, looking for more audit evidence and documentation and applying greater skepticism and scrutiny.
The article reports that some audit committee members are hearing “presentations from audit firms explaining how they plan to approach controls differently going forward. ‘They’re basically saying they’re being responsive to the findings in the inspection reports, and that’s increasing the work,'” commented one committee member. That same member indicated that he expected “auditors to spend more time creating flowcharts of processes and transactions to identify potential sources of misstatement. ‘Under auditing standards, you have to have an understanding of the flow of transactions as a basis for setting the scope of audit work….The PCAOB has formed a view that a lot of audits are not sufficient in documenting the flow of transactions, so the firms are moving to flowcharting.'”
The article also reports that auditors will also be “asking more questions and performing more documentation on the skills and qualifications of individuals within the company who perform various control activities. As an example, [the committee member said], most control systems have some kind of reconciliation procedure, such as reconciling a bank account to a master account. Typically, auditors accept the qualifications and the details of the reconciliation without a great deal of questioning, he says. ‘The board now is saying they think auditors should get into the detail of who did the reconciliation and how that person performed the reconciliation….If you rely on a review of the reconciliation as a control, you ought to talk to the person who does it and determine what they do when they review it.'”
Another commentator noted that “internal auditors likely do not perform documentation to the level of detail that external auditors are now demanding, … because they work more closely on a daily basis with the processes…. [C]onsensus is still very much developing on what external auditors need to do to gain the PCAOB’s approval during inspections. ‘In some areas, external auditors are just not sure what’s going to satisfy the reviewers….They’re not always clear on what’s needed or not needed.'”
Apparently, the issue of who will bear the costs has not often been raised with audit committees. “‘Establishing or creating more audit evidence means doing more work, and that means incurring more cost….The cost needs to be shifted somewhere. The cost is absorbed either by paying for it directly with the external audit costs going up, or by absorbing it internally as the company does more documentation and more work.'”
Meanwhile, this Reuters article details how PCAOB Chair Jim Doty is saying that the PCAOB may take enforcement action against China-based auditors if it cannot obtain access to the audit papers of China-based companies.
Let’s gear up for the ’13 proxy season with a little humor. Proposal #12 from this Form 6-K filed by Nomura Holdings – a Japanese investment and financial services company – is quite an eye-opener. This shareholder proposal – entitled “Amendment to the Articles of Incorporation (Regarding overhaul of basic daily movements)” – would require that all toilets in the company’s offices be Japanese-style toilets, which are on the floor requiring the user to squat. The proponent’s reason for the proposal is that the company is on the verge of bankruptcy and it is time to get serious. Or more specifically as noted in this article:
“cannot avoid bankruptcy if it merely adopts a spiritual approach such as encouraging sales persons to speak in a loud voice, but the company can surely avoid failure if they straddle over a Japanese-style toilet every day and strengthen their lower body.”
Anyways, be glad that you are not dealing with shareholder proposals in Japan. As noted in this Huffington Post article, the proponent who submitted this toilet proposal had submitted a total of 100 proposals to Nomura, of which only 18 were accepted for the ballot. I didn’t do diligence to rifle through the 19 proposals to be voted upon and see if they were from the same proponent – but the title of Proposal #5 did catch my eye: “Amendment to the Articles of Incorporation (Regarding limit on the ratio of personnel expense to income and giving three banzai cheers)”…
Two Reports on Shareholder Proposals: Environment, Social & Declassification
– 48 S&P 500 companies entered into agreements to move toward declassification;
– 38 successful precatory proposals, with average support of 82% of votes cast;
– Over 60% of successful precatory proposals by public pension funds and over 30% of all successful precatory proposals; and
– 42 board declassifications, reducing the number of classified boards among S&P 500 companies by one-third.
You Commit Fraud in China? Death
As noted in this article from way back, two brothers and their father were sentenced to death recently for cheating 15,000 investors out of over $1.1 billion. And this Bloomberg article notes how a woman was sentenced to death for engaging in a $113 million fraud a few years back…
Move over Dave & Marty! Ginny & Broc are gonna give you a run for your entertainment dollars. In this podcast, Ginny Fogg of Norfolk Southern provides some insight into how to handle shareholder proposals, including:
– What is your shareholder proposal intake process (eg. who gets copies and is there a log)?
– What are the steps in deciding how to react to a shareholder proposal?
– What do you do for relief during the proxy season?
– Who drafts and reviews a statement in opposition to a shareholder proposal?
– What is a typical gameplan in handling a shareholder proponent who says they are coming to the annual meeting?
Last week, I asked “how many firms does it take to reach a consensus?” I received many responses but this one was the most clever: “It takes 10 for a minyan (quorum) in Judaism. That sounds like a good number for a consensus.”
Conflict Minerals Briefs: More Coming In!
Recently, I blogged that briefs were being filed in the conflict minerals lawsuit filed by the Chamber. Here is a Compliance Week article and a Davis Polk blog discussing these briefs in more detail…
The Ongoing Saga of Judge Rakoff & the SEC
For several years, Judge Jed Rakoff has been rejecting SEC settlements because he thinks they are too soft – particularly the agency’s practice of allowing companies to settle fraud cases without having to admit that they had done anything wrong. This DealBook article lays out the oral arguments before a federal appeals court in the SEC v. Citigroup case. And here is a “Securities Law Prof Blog” about it…