August 3, 2017

Virtual-Only Meetings: On the Rise Despite Controversy

Recently, Broadridge reported an increase in virtual meetings in 2016 – see this list of who’s holding them. Of 187 virtual meetings, 80% were “virtual-only” – compared to 67% in 2015. And of the 44 companies that held a hybrid meeting in 2015, 12 of them switched to virtual-only in 2016. Just one company switched from virtual-only to hybrid.

We’ve blogged before about opposition to virtual-only meetings – from New York’s Comptroller and from CII – but we’ve also heard from companies that have escaped criticism by proactively discussing the costs & benefits with shareholders.

Learn more about the “nuts & bolts” of virtual-only meetings from this webcast transcript and “Virtual Shareholder Meetings” Practice Area.

Proxy Access: CII Updates “Best Practices”

In response to widespread adoption of proxy access – and the possibility that some companies may be including provisions that impair proxy access utility – CII has updated its “best practices” for implementing these bylaws (originally issued in 2015).

The 8-page chart weighs in on newly-identified provisions, recognizes where CII’s preferences deviate from prevailing market practices, and explains why CII opposes the following provisions:

– Requirements for nominators to hold stock after the annual meeting
– Restrictions on re-nominations
– Limitations on nominees’ third-party compensation arrangements
– Automatic suspension of proxy access for all shareholders in the event of a proxy contest
– Unlimited indemnification requirements on nominating shareholders

Here’s CII’s member-approved policy:

Companies should provide access to management proxy materials for a long term investor or group of long-term investors owning in aggregate at least three percent of a company’s voting stock, to nominate less than a majority of the directors. Eligible investors must have owned the stock for at least two years. Company proxy materials and related mailings should provide equal space and equal treatment of nominations by qualifying investors.

To allow for informed voting decisions, it is essential that investors have full and accurate information about access mechanism users and their director nominees. Therefore, shareowners nominating director candidates under an access mechanism should adhere to the same SEC rules governing disclosure requirements and prohibitions on false and misleading statements that currently apply to proxy contests for board seats.

Transcript: “12 Strange Things in the Securities Laws”

We’ve posted the transcript for our popular webcast: “12 Strange Things in Securities Laws.” Here’s what we covered:

1. The Section 4(a)(3) Dealer’s Exemption

2. Sometimes Rules Don’t Mean What They Say

3. Transactional Registration & Control Securities

4. How Small Non-Executive Officer Shareholders Can Be Section 16 Reporting Persons

5. The Trust Indenture Act – What Is It?

6. The Need to Know Some GAAP

7. “Legal” Insider Trading

8. Tender Offers for Minority Stakes in Private Companies

9. Statutory Underwriters” and “Public Offerings”

10. A Lot of What Goes Into SEC Filings Isn’t Dictated by Rules or Staff Guidance

11. The Case of the Missing Fourth Quarter

12. Federal and State Filing Notice “Requirements”

If we didn’t get to your favorite “strange thing” – drop us a line!

Liz Dunshee