Monthly Archives: May 2014

May 15, 2014

Conflict Minerals: Full Steam Ahead as Court Denies Stay Motion Again

Moonshot denied. In a one-sentence order, as noted in this WSJ article, the US Court of Appeals for DC denied NAM’s emergency motion to stay effectiveness of the SEC’s conflict minerals rules yesterday. This happened the day after NAM filed its reply to the SEC’s brief in the matter. So it looks like the courtroom drama is over and companies should be preparing to file their first Form SDs by the end of June 2nd in accordance with Corp Fin’s latest guidance on the topic (here’s the memos about this guidance from our “Conflict Minerals” Practice Area)…

SEC’s Office of Chief Accountant: Looking for Work?

Gave a double take when I saw the title of this WSJ blog: “SEC Frets It’s Not Getting Enough Accounting Questions.” In it, the Deputy Chief Accountant Dan Murdock notes that questions are down 40% and he wonders what is causing the decline. He did posit a number of possible reasons for the decline such as fewer new accounting rules, decline in transactions with complex accounting, auditor’s national offices receiving fewer requests from fellow auditors in the field and an increasing focus on internal controls by auditors.

My poll results for which celebrity would you buy a piece of? Winner is Bing Crosby (38%); followed by Paris Hilton (23%); Mayor Rob Ford (20%); Smokey the Bear (11%) and DaMar (7% – the Dave & Marty combo)…

What is “DealNexus”?

In this podcast, Tony Hill, the Director of DealNexus at Intralinks, explains DealNexus – a social dealmaking tool specifically designed for deals, including:

– How does DealNexus work?
– How does it differ from AngelList and other online connectors?
– What’s new in the DealNexus 3.0 update?
– Any surprises since you launched?

– Broc Romanek

May 14, 2014

Broc’s Mailbag: “These Are Facts Based on Opinion”

Below is a series of responses to questions from members over the past month – feel free to ask me anything (“AMA”) as this is a new regular feature of this blog:

1. Value of Virtual-Only Annual Meetings – First I have to give a hat tip to Jon Stewart and “The Daily Show.” My fave quote from that show is – “These are facts based on opinion” – in the midst of impersonating the news channel that it likes to make fun of the most.

Anyways, in my latest blog noting that last year saw a significant rise in the number of virtual annual meetings (courtesy of Broadridge’s turnkey solution) – 100 of them! – I noted that I had been waffling about whether they were a good thing. I am well aware that the bulk of annual meetings are a waste of time and resources as nothing happens and the company meanwhile has gathered a lot of firepower there (ie. senior managers & the full board). This recent DealBook article entitled “Telling Off the C.E.O., Once a Year” bears this out. Where do I stand now on this topic?

I have been wracking my brain for a framework that would allow shareholders to preliminarily indicate whether they desired a physical meeting. The problem with that approach is that something could come up between the time that shareholders indicate on whether a physical meeting is necessary – and the time that the annual meeting is actually held. The recent discovery of a substantial shortfall of regulatory capital at Bank of America recently proves this point. BofA’s annual meeting was last week – so shareholders who were happy the week before might suddenly be unhappy.

So since the annual meeting is the single time per year that management – and more importantly, the board – is forced to potentially face the music, I am leaning towards the “virtual-only meetings are a bad thing” side. The potential waste of resources is a necessary evil to keep management on its toes. Being challenged virtually can’t compare to being challenged in the flesh.

And then there is the real risk of angering shareholders – as well as the media. For example, PNC Financial and BNY Mellon recently amended their bylaws, which drew the ire of the local Pittsburgh press in this article. And CII’s strong opposition to virtual meetings still stands. So all in all, it’s a risky thing to do in my book…

2. Invoking the Safe Harbor at Annual Shareholder Meetings – Recently, I got this question from a member: “We are preparing for our annual meeting and would like to know how other companies incorporate a “forward-looking statements” disclaimer into presentations by management. Presently, we include the disclaimer on a slide and read it prior to the CEO’s message.”

There are two sides of this debate. One is that a reading of a disclaimer is standard operating procedure and that most shareholders are used to it – and even those that aren’t probably won’t even really notice it as legalese is not something that people tend to tune into.

The other is that this type of legalistic opening gets the AM off to a bad start, with the message that “we are here to CYA rather than have an interactive dialogue and (hopefully) celebrate a good year with the shareholders.” This thinking balances the limited benefits (ie. limited risk unless you go way off the track) outweighed by the negativity of it. Double up on the donuts if you do it perhaps.

Playing devil’s advocate again. The counter to that is that the disclaimer is designed to bolster more fulsome disclosure by management (you can talk about prospects, etc, without fear of ultimately being wrong) – whereas without it, you would feel constrained about saying anything that is forward-looking in nature.

My practical solution is a middle ground. Turn the reading of the safe harbor into a cutesy opening. Dress up a kid in a safe harbor t-shirt at the front of the room, show the language scrolling on big screens – and have everyone follow along as the kid sings the safe harbor. The whole “Pledge of Allegiance” type of thing. Only problem is that the kid likely will steal the show…

3. Phone Voting Still Necessary? – Another member asked: “When can we get rid of phone voting? It’s antiquated, cumbersome, etc. and mobile voting now surpasses it based on volume of voting. Less than 2% of shares are now voted by phone. Getting rid of it would take costs out of the system.”

Definitely send in your rants. Getting them off your chest will improve your health. And I would never identify you without your permission. Personally, I think cutting down on voting opportunities is not sound shareholder relations – and certainly not good optics. But I asked the opinion of the person that sent in the question. Here is her response:

“Most people who receive paper proxy materials now vote through Internet, not mail or phone. Anyways, as I understand it, the phone voting option is time-consuming for all involved since the flow of how those calls go can be so messy, particularly now that the one-stop “Vote With Management” option is gone.

Unfortunately, companies don’t have the ability to turn off phone voting as that is a decision between Broadridge and its clients, the brokers. Companies could choose to turn it off for their registered holders, but that is just a drop in the bucket. Another avenue is that companies could opt not to mention phone voting in their proxy statements, but brokers would still probably offer phone voting.

This may not be a real “problem” to solve, but there are costs of maintaining the phone voting infrastructure that seem unnecessary, particularly since phone voting is so confusing for the average person, even with touch-tone prompts. If phone voting can’t end now, there should be some kind of 5-year plan to phase it out, with the blessing of the SEC of course.”

4. Questions About Registration of Warrants – “Why doesn’t anyone ever answer the questions about registering warrants in the “Q&A Forum” on this site?”

I plead the Fifth!

plead fifth.gif
5. Cybersecurity Roundtable Reenactment – “It would be really cool if your tech savvy staff could take the archive of the SEC cybersecurity roundtable and then edit in part of the beginning of the 1960s TV show: ‘The Outer Limits’.”

Glad to see folks getting into the new videos. My tech-savvy staff is merely myself – and I did the next best thing by playing 8 different roles in this reenactment video:

Corp Fin Grants 1st Foreign Issuer Deregistration No-Action Relief Under Rule 12h-6

Last week, Corp Fin gave no-action relief to Sundance Energy Australia Limited, which is the first busted IPO letter that the Staff has given in the Form 15F/Rule 12h-6 context, which is the special deregistration rule for foreign private issuers. It’s not incredibly remarkable, but it’s a first in the area…

More on our “Proxy Season Blog”

We continue to post new items regularly on our “Proxy Season Blog” for 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:

– Form 10-K Length: Does Size Matter?
– Shareholder Proposals: Novel “Good Job” Proposal
– Disney Trades Proxy Access for Change in Board Leadership
– Will Shareholders Ask About the New COSO Framework at Annual Meetings?
– ISS Talks “Issuer Engagement with ISS”
– Shareholder Proposals: 1-Year Holding Requirement Even Applies to IPOs

– Broc Romanek

May 13, 2014

Delaware Supreme Court Finds Fee-Shifting Bylaws Permissible

Here’s news from Paul Weiss (memos on this case are posted in the “Securities Litigation” Practice Area):

In an opinion that may dramatically change the landscape of stockholder litigation, the Delaware Supreme Court upheld – in ATP Tour, Inc. v. Deutscher Tennis Bund – a fee-shifting by-law that required plaintiffs to bear the costs of intra-corporate litigation if the plaintiffs were not successful on the merits or did not achieve “in substance and amount, the full remedy sought.”

In finding that the bylaw was permissible as a matter of law, the court held that “[n]either the DGCL nor any other Delaware statute forbids the enactment of fee-shifting bylaws” and “[m]oreover, no principle of common law prohibits directors from enacting fee-shifting bylaws.” This conclusion follows from the fact that bylaws are a form of contract and that fee-shifting is a well-settled contractual device for allocating risk. The court notes that the adoption and application of such a fee-shifting bylaw must comply with a board’s fiduciary duties, but if the board so complies, such bylaws are facially permissible and enforceable, even for the purpose of deterring litigation. As the court holds, “[f]ee-shifting provisions, by their nature, deter litigation. Because fee-shifting provisions are not per se invalid, an intent to deter litigation would not necessarily render the bylaw unenforceable in equity.”

The opinion addresses a bylaw put in place in the context of a non-stock corporation, but the holding may be read to apply to all Delaware corporations. Whether such a bylaw is appropriate for a particular corporation, will, however, depend on a number of factors specific to such corporation and care should be taken in connection with an adoption of such a bylaw. Because this is the first case addressing fee-shifting bylaws, the reaction of proxy advisory firms and other interested parties in the corporate governance arena is yet to be known. Further, the court was careful to note that such a bylaw may be facially valid, but nevertheless be invalid if adopted or used for an inequitable purpose.

Conflict Minerals: A Second Form SD Filed

Yesterday, Affymetrix became the 2nd company to file a Form SD – see some analysis from Steve Quinlivan and analysis from Elm Consulting. Here’s my blog about the first…

More on our “Proxy Season Blog”

We continue to post new items regularly on our “Proxy Season Blog” for 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:

– Shareholder Proposals: Trends for the Season & How to Keep Track
– Declassification: 75% of ’14 Engagements Have Already Produced Agreements
– Increasing Use of Nonbinding Shareholder Proposals to Seek Divestitures
– Will Corp Fin Start Objecting to Too Many 10-Q Risk Factors?
– Cere’s Climate Change Disclosure Campaign Continues
– Not Counting “Abstentions”: A Rebuttal

– Broc Romanek

May 12, 2014

How Much Would You Charge For a Rule 144 Opinion?

A while back, I was posting updated sample memos, letters, etc. in our “Rule 144″ Practice Area – I just posted this updated “Rule 144 Handbook” – and I was reminded of Keith Bishop’s blog on “How Much Would You Charge For a Rule 144 Opinion?” And Keith’s latest is entitled “Rule 144 Opinion Letters – Do They Protect Anyone?” I’d be interested in your feedback…

A lot of members sent on this NPR bit about “To Find Insider Trading, Follow The Kids’ Money.”

Webcast: “Appraisal Rights: A Changing World”

Tune in tomorrow for the webcast – “Appraisal Rights: A Changing World” – during which Morris Nichols’ John DiTomo, Morris Nichols’ Eric Klinger-Wilensky and Berger Harris’ Lisa Stark will analyze how appraisal rights work in a changing world, how to overcome common problems, and more.

As noted in Steve Quinlivan’s blog, the SEC has filed its response to NAM’s motion for an emergency stay in the conflict minerals case…

Poll: How Much Would You Charge for a Rule 144 Opinion?

The story above begs the question about how much would you charge for a standard Rule 144 opinion letter? Please participate in this anonymous poll:

surveys & polls

– Broc Romanek

May 9, 2014

Disclosure in 1791! How Does the First IPO Compare?

My good friend James Lopez – currently on a second tour in Corp Fin – recently wrote this fascinating article about how the first IPO prospectus in the US looked. We’re talking 1791 here! Two hundred years plus. James dug out this first disclosure document from the papers of Alexander Hamilton. Here is an excerpt from the article:

Returning to the three topics mentioned previously, today Item 501 of Reg. S-K requires disclosure of the price per share and amount of shares being offered. The SUM’s prospectus states that each share will cost $100, the company will be capitalized with 5,000 shares, and “no subscriber shall be bound to pay until an Act of Incorporation shall have been obtained–for which application may be made as soon as the sums subscribed shall amount to One hundred thousand Dollars.” The SUM prospectus, therefore, generally satisfies basic pricing disclosure requirements.

What about the second requirement, a description of the business? We already know from the quotes above that the prospectus provided a broad overview of the SUM’s planned business. Item 101 of Reg. S-K contains many subtopics, and remarkably the SUM prospectus covers a few of these. For example, Item 101(c)(iii) requires discussion of the “sources and availability of raw materials.”

The SUM prospectus deals with the availability of potential locations for the intended business and states that the first choice, New Jersey, “is thickly populated–provisions are there abundant and cheap.” Item 101(c)(x) requires a discussion of the competitive conditions of a company’s business, including its principal products or services and the “methods of competition.” On this, the SUM prospectus lists more than a dozen proposed products, including “Thread, Cotton and Worsted Stockings” and “Brass and Iron Wire.” It goes on to state that “[t]o insure [sic] success it is desirable to be able to enter into competition with foreign fabrics in three particulars–quality, price, term of credit.” The prospectus then tackles each of these methods of competition in some detail. The SUM is two for two.

On the third requirement, today’s IPO prospectus includes a discussion of the most significant factors that make the offering speculative or risky, pursuant to Item 503 of Reg. S-K. The SUM prospectus’ third paragraph consists of the following sentence: “The dearness of labour and the want of Capital are the two great objections to the success of manufactures in the United States.”

Well, then, that’s clear and concise. In a few additional paragraphs the SUM prospectus focuses on each of these challenges in detail. For example, as for needing labor it states that “emigrants may be engaged on reasonable terms in countries where labour is cheap, and brought over to the United States,” and that “women and even children in the populous parts of the Country may be rendered auxiliary to undertakings of this nature.” Modern child labor laws aside, it looks like the SUM is three for three.

Also check out this recent article entitled: “The Rise And Fall Of The Largest Corporation In History.” The Vereenigde Oost-Indische Compagnie – also known as the United East India Company – was not only the first multinational corporation to exist, but also probably the largest company in history.

Confidential Treatment Requests: Don’t Need CTR to Omit Personal Information

Jay Knight of Bass Berry reports: Recently, Corp Fin Deputy Director Shelley Parratt noted at a conference that personally identifiable information (e.g., bank account numbers, social security numbers, etc.) can be redacted from SEC filings without a confidential treatment request. This is helpful to companies concerned about privacy issues, particularly for filing schedules to exhibits. Although this isn’t necessarily a new Staff position, it is an area where the Staff has been sometimes inconsistent since it wasn’t explicit in prior guidance.

Applying Morrison, Second Circuit Affirms UBS Credit Crisis Securities Suit Dismissal

As Kevin LaCroix explains in his blog, after the Supreme Court issued its opinion in Morrison v. National Australia Bank, the plaintiffs’ lawyers developed a number of theories to try to circumvent Morrison to assert claims under the U.S. securities laws on behalf of investors who purchased their shares in the defendant foreign company on a foreign exchange. These theories – including the so-called “listing theory” and the “f-squared” theory – have been largely rejected in the district courts, but the appellate courts had not yet weighed in. That is, until now. Learn more in the memos we have been posting in our “Securities Litigation” Practice Area.

– Broc Romanek

May 8, 2014

Survey Results: Proxy Drafting Responsibilities & Time Consumed

Below are the results from a recent survey that I conducted on the topic of proxy drafting responsibilities (including items such as the amount of time consumed; compare these results to same survey conducted in ’10):

1. The following takes the lead in drafting the proxy statement at our company (excluding the executive compensation disclosures):- In-house Securities Attorney – 64%
– In-house Human Resource Staff – 3%
– In-house Accounting Staff – 3%
– General Counsel – 8%
– Corporate Secretary/Assistant Corporate Secretary – 21%
– Outside Counsel – 7%
– Outside Consultant – 2%
– Other – 2%

2. The following takes the lead in drafting the CD&A/other executive compensation:
– In-house Securities Attorney – 59%
– In-house Human Resource Staff – 33%
– In-house Accounting Staff, including CFO – 5%
– General Counsel – 12%
– Corporate Secretary/Assistant Corporate Secretary – 19%
– Outside Counsel – 11%
– Outside Consultant – 5%
– Other – 1%

3. The following provides significant assistance in drafting the CD&A/other executive compensation disclosures:
– In-house Securities Attorney – 37%
– In-house Human Resource Staff – 55%
– In-house Accounting Staff, including CFO – 28%
– General Counsel – 12%
– Corporate Secretary/Assistant Corporate Secretary – 18%
– Outside Counsel – 21%
– Outside Consultant – 20%
– Other – 6%

4. The following are involved in reviewing and providing comments on the draft CD&A/other executive compensation disclosures:
– In-house Securities Attorney – 46%
– In-house Human Resource Staff – 70%
– In-house Accounting Staff, including CFO – 60%
– General Counsel – 58%
– Corporate Secretary/Assistant Corporate Secretary – 47%
– Outside Counsel – 78%
– Outside Consultant – 59%
– Other – 15%

5. For the lead drafter, the following is the estimated amount of time devoted to drafting proxy disclosures for this year:
– Less than 100 hours – 27%
– 100-200 hours – 38%
– 200-300 hours – 20%
– 300-500 hours – 10%
– Too many hours to even estimate – 5%

6. For all those involved in drafting proxy disclosures (including the lead drafter as well as people outside the company), the following is the estimated amount of time devoted to drafting proxy disclosures for this year:
– Less than 100 hours – 8%
– 100-200 hours – 21%
– 200-300 hours – 20%
– 300-500 hours – 25%
– 500-700 hours – 6%
– Too many hours to even estimate – 20%

Please take a moment to respond anonymously to our “Quick Survey on Distributing Proxy Materials Via E-mail to 401(k) Plan Participants‘ and ‘Quick Survey on Pay Ratios.”

Conflict Minerals: Court of Appeals Sets Emergency Motion Schedule

As noted in this Akin Gump blog, in response to NAM’s emergency motion for stay filed on Monday, the US Court of Appeals for the DC Circuit issued an order yesterday setting the briefing schedule so that appellees’ opposition to the emergency motion will be due by May 9th – and appellants reply will be due by May 13th. Given the June 2nd reporting deadline, NAM has requested a decision by May 26th…

Capital Formation: 15 House Financial Service Bills Marked Up

As noted in the “MoFo Jumpstarter,” a total of 15 capital formation bills were marked up yesterday in the House Financial Services Committee. With so many “entrants,” it feels like the Kentucky Derby. Wonder what the betting line is for each of those? And does some bill have to “win” and move on to become a law?

– Broc Romanek

May 7, 2014

Disclosure Reform: What Do Investors Want?

In my first blog on disclosure reform, I identified three issues that I think should frame the SEC’s project – pretending that the existing disclosure regime doesn’t exist. As I head to CII’s Spring Conference today, let’s tackle the first issue – what is it that investors want? Below you will read (and listen) about an institutional investor survey indicating that most investors skip to specific sections of proxies. And that 6% of investors don’t read them at all. Of course, that number gets much higher if retail investors were included in that survey. And in talking to institutional investors, it might be a lower level staffer who is tasked with reading the proxies as some of the folks on an investor’s proxy committee – all of whom can influence the vote for that investor – that don’t read the proxies at all. Instead, they rely on a short summary from that lower level staffer.

This shows that most investors don’t do a straight read. That makes sense based on my own personal reading habits of SEC filings. But I would posit that different investors value different types of disclosures. That means that “less is not more” as I believe that most investors don’t care about the ultimate length of a disclosure document as they navigate to the sections they want and aren’t concerned with reading the entire thing. This reflects the sentiments expressed by Corp Fin Director Keith Higgins in his recent speech on disclosure reform (ie. reducing volume of disclosure is not the sole end game, particularly given that many investors have expressed an appetite for more information, not less).

So the mission of the SEC’s project shouldn’t be about reducing document size. However, I do imagine that investors want a better reading experience for those sections that they do read – in other words, better usability. That’s one of the reasons I have been highlighting fine examples of usable disclosure in my spate of recent videos about ’14 proxy statements. It might be time for a “Plain English 2.0” campaign by the SEC.

But let’s back up. How important are SEC filings compared to other ways that a company communicates? Earnings calls, investor conferences, interviews with senior executives in the press, other postings on the IR web page and via social media. It’s fair to say that investors care more about those other ways (and of course, neutral third-party analysis is even more valuable – but that doesn’t mean that corporate disclosure isn’t important. Investors and those neutral third parties need info directly from the source too). This touches on the second issue about how disclosure is made available – but I think it’s important to consider why investors might care about communications outside of SEC filings more.

It’s because more forward-looking information might be gleaned in those types of communications. It’s also likely that content is more “straight talk” in nature since its not as “lawyered” as a SEC filing. I believe that if more disclosure made in SEC filings was crafted in the vein of Warren Buffett’s letter to shareholders, it would be consumed by investors more. I know that we all can’t be Warren – but that doesn’t mean we shouldn’t try or be trained to write so.

Anyways, more surveys will be conducted about what investors want to see in disclosure – and the results will be meaningful to guiding disclosure reform. But I also think that big data should play a role here. I don’t want to place too much reliance on the short-term – but studies already show what type of corporate information is most likely to cause the market to move. Some investors might state that they want certain types of information, but their behavior illustrates that they really care about other types.

Finally, consider the medium. I think video will continue to take off as a way to reach investors. Consider this excerpt from this interview with communications expert Nina Eisenman:

So we had the opportunity to interview some buy-side and sell-side analysts about this topic, and most analysts will go directly to the 10-K. The interesting thing that we found in our interviews is that if there is video content, and the video content is not just a reiteration of the content they just read (so it can be something like a virtual investor day by showing new facilities or a new product line) investors are very interested in seeing that type of content. It adds another layer that they couldn’t get from the print.

Investor Survey: Proxy Disclosure Preferences

At our proxy disclosure conference last year, one panel still rings in my mind about how one institutional investor said she might have a staffer spend 20 minutes on a single proxy statement – but then that company might garner a maximum of 5 minutes worth of discussion during the proxy committee meeting when the actual decision is being made to cast votes for the company’s annual meeting. For me, this speaks volumes about how important it is to strategize when deciding on your approach to conveying your story to investors.

Here’s news from Davis Polk’s Ning Chiu:

Even with the intense focus on improving proxy disclosure, a recent survey of investors from RR Donnelley indicates that few read all the details. 60% responded that they skip directly to specific sections, usually the CD&A executive summary. That, along with the proxy statement summary if one is available, and the CD&A, are considered the key sections. 12% reported they don’t read proxies at all, and only 6% review the entire document.

Disclosure that received high marks includes director nominee information, director independence, corporate governance profiles and company opposition statements to shareholder proposals. While investors also generally liked the discussion of compensation philosophy, they were lukewarm about the clarity of specific compensation disclosure surrounding pay-for-performance alignment and performance measures, which is unfortunate given investors’ sentiments that these areas are two of the most important considerations affecting voting decisions. Director-related disclosure that received poor marks includes succession planning and board evaluations. We note that neither discussion is required by regulation, but has become more common due to investor interest.

While providing graphic presentations for executive compensation is a trend that is clearly favored by investors, respondents complained about graphs that were “over-engineered”, complex and poorly-labeled or simply difficult to follow. Companies should be aware that some investors believe they were being deliberately misled in certain cases.

In terms of presentation, an overwhelming number of investors reported that they view proxies through online platforms rather than reading hard copies. Their own voting policies and analysis, along with direct engagement with the company and a review of proxy statements, are the biggest influences in how they vote. Not surprisingly, investors wish proxies were shorter, preferably under 60 pages.

Podcast: Investor Views on Proxy Disclosure

In this podcast, Ron Schneider discusses RR Donnelley’s recent survey of institutional investors about what really matters to them in proxy statements (here’s a survey summary), including:

– Why did RR Donnelley conduct the survey?
– What was the survey’s methodology, target audience and who responded?
– What were the key results of or lessons learned from the survey?
– What were the most surprising responses to the survey?
– How can companies use the intelligence gleaned from the survey?

Recently, SEC Commissioner Aguilar delivered this speech on “Looking at Corporate Governance from the Investor’s Perspective”…

– Broc Romanek

May 6, 2014

Just Added! Corp Fin Director Keith Higgins to “Proxy Disclosure Conference” Lineup!

We are very excited to announce that Corp Fin Director Keith Higgins will be part of our “Annual Proxy Disclosure Conference” on September 29th-30th. Registrations for our popular pair of conferences (combined for one price) – in Las Vegas and via video webcast – are strong and for good reason. Register by this Friday, as rates go up after that!

The full agendas for the Conferences are posted – but the panels include:

– Keith Higgins Speaks: The Latest from the SEC
– Preparing for Pay Ratio Disclosures: How to Gather the Data
– Pay Ratio: What the Compensation Committee Needs to Do Now
– Case Studies: How to Draft Pay Ratio Disclosures
– Pay Ratio: Pointers from In-House
– Navigating ISS & Glass Lewis
– How to Improve Pay-for-Performance Disclosure
– Peer Group Disclosures: The In-House Perspective
– In-House Perspective: Strategies for Effective Solicitations
– Creating Effective Clawbacks (and Disclosures)
– Pledging & Hedging Disclosures
– The Executive Summary
– The Art of Supplemental Materials
– Dealing with the Complexities of Perks
– The Art of Communication
– The Big Kahuna: Your Burning Questions Answered
– The SEC All-Stars
– Hot Topics: 50 Practical Nuggets in 75 Minutes

Act Now: Register by the end of this Friday, May 9th, to get a reduced rate of 20%!

ExxonMobil’s 2014 “Executive Compensation Overview”

For the 4th year in a row, ExxonMobil has put together a 12-page “executive compensation overview” that supplements its proxy statement, as noted in this 80-second video:

More on our “Proxy Season Blog”

We continue to post new items regularly on our “Proxy Season Blog” for 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:

– Think You Hold “Irrevocable Proxies” to Back Up Voting Agreements with Large Investors/Dissidents? Think Again!
– MD&A Case Addresses Whether an Uncertainty Is “Known”
– Advances in Technology May Impact Segment Reporting
– Shareholder Proposals: Case Involving Statement in Opposition
– An Interview with Vanguard on Shareholder Engagement & More
– Shareholder Proposals: WCN Wins “Proposal by Proxy” Appeals Case
– Update: District Court Denies Motion for Reconsideration in MD&A Case

– Broc Romanek

May 5, 2014

Conflict Minerals: SEC Issues Partial Stay of Rule

On Friday, the SEC issued an order of partial stay of its conflict minerals rule (for those portions of the rule that the appellate court held violates the 1st Amendment). Since Corp Fin’s guidance from earlier in the week already gave companies flexibility to not provide disclosure that arguably would violate the 1st Amendment, this formal action by the Commissioners doesn’t add anything new. Perhaps this order and Corp Fin’s guidance were originally supposed to come out at the same time – but then this Commission order was held up because they knew NAM and the other petitioners were going to file a motion for a full stay – which they did on Thursday – and the SEC’s order denies this motion by granting only a partial stay.

This doesn’t mean the battle with NAM, et al is over as they are still fighting this in court with this new emergency motion for stay, looking for a May 26th ruling by the court – as noted in this Akin Gump blog

1 Cool Thing About Amazon’s ’14 Proxy Statement

Amazon’s 2014 proxy statement is old-fashioned – only 25 pages long and few charts & graphics. Here is an 80-second video about it:

More on our “Proxy Season Blog”

We continue to post new items regularly on our “Proxy Season Blog” for 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:

– CEO-CFO Certifications: Should Corp Fin Staffers Review Them?
– Shareholder Proposals: Cash Awards for Best Proxy Advisor
– Shareholder Proposals: Stats for This Proxy Season
– Sustainability: SASB & IIRC Agree to Disclosure Standards
– MD&A: Don’t Forget Material Trends and Uncertainties
– Statements in Opposition: Use of Bullets

– Broc Romanek

May 2, 2014

Going to Print: Popular “Romeo & Dye Section 16 Forms & Filings Handbook”

Good news. Alan Dye just completed the 2014 edition of the popular “Section 16 Forms & Filings Handbook,” with numerous new – and critical – samples included among the thousands of pages of samples. Remember that a new version of the Handbook comes along every 4 years or so – so those with the last edition have one that is dated. The last edition came out in 2009.

Act Now: If you don’t try a ’14 no-risk trial to the “Romeo & Dye Section 16 Annual Service,” we will not be able to mail this invaluable resource to you this month when it’s done being printed. The Annual Service includes a copy of this new Handbook, as well as the annual Deskbook and Quarterly Updates.

Does the SEC Have Authority to Require Disclosure to Further Societal Interests?

A few weeks ago, in the midst of a blog on a different topic, I noted that conflict minerals wasn’t a good idea for the securities law. This led to an interesting email discussion with Adam Kanzer, Domini Social Investments’ General Counsel about what is the purpose (purposes?) of eliciting disclosure from public companies.

Here are Adam’s thoughts on the subject:

Is there a social purpose of the securities laws? Although the original intent was to guard against fraud, that was the problem of the day. If one reads Section 2 of the 34 Act, it seems pretty broad to me. If the capital markets are creating broad societal problems, I think the SEC has authority, as they did with Y2K, and as they do with climate change.

The original enacters of the ’33 and ’34 Acts, of course, were not considering conflict in the Congo or climate change (both of which raise significant social, environmental and economic issues). The point is that the SEC has broad authority to regulate capital market participants to protect the public interest. That’s a broad mandate that they should embrace. According to this study by Steve Lydenberg, the key phrase “necessary or appropriate in the public interest or for the protection of investors” appears in several variations approximately 210 times in the 34 Act.

I find it very hard to accept that the Roosevelt Administration intended to create an agency solely dedicated to the financial interests of the wealthiest Americans, and I strongly suspect that if Brandeis were alive today, he’d recognize his fingerprints on the conflict minerals rule. For more, check out Cynthia Williams’ Harvard Law Review article on the SEC and ESG disclosure. It’s time for the SEC to recapture its original purpose in a world of globalized systemic risks.

Happy Anniversary Baby! 12 Years of Blogging and Counting

Tomorrow marks 12 years of my blither and bother on this blog (note the Blog is over 10 years old – not shabby!). It’s one time of the year that I feel entitled to toot my own horn – as it takes stamina and boldness to blog for so long. A hearty “thanks” to all those that read this blog for putting up with my personality. I’m sure I won’t get more refined with age…

– Broc Romanek