April 3, 2018

ISS Updates 15 Policy FAQs

Oddly late for the proxy season, ISS updated its “FAQs on US Voting Procedures” late last week (changes are highlighted in yellow). In comparison, these FAQs were updated last proxy season in late February (arguably also late for those grappling with the proxy season). As noted in this Steve Quinlivan blog, the updates relate to:

– When are ISS’s proxy reports issued?
– How and when will ISS change a vote recommendation in a proxy alert?
– How can a company request engagement with the U.S. research analysts?
– When is the best time to request an engagement?
– What topics are generally discussed in engagements regarding non-contentious meetings?
– Is there a blackout period for engagement with research?
– What exceptions to the attendance policy apply in the case of a newly-appointed director?
– Proxy access proposals: How will ISS evaluate a Board’s implementation of proxy access in response to a majority-supported shareholder proposal?
– How will ISS apply the new 2018 policy whose previously-grandfathered poison pills will be expiring shortly?
– How do companies terminate poison pills prior to the expiration date?
– Does ISS still consider deadhand or slowhand provisions problematic?
– What if a company adopts a poison before the company goes public?
– Removal of Shareholder Discretion on Classified Boards
– Which types of charter/bylaw adoptions are likely to result in continued adverse voting recommendations?
– What is the purpose of the Governance Failures Policy?

Congress Boosts Edgar Funding – SEC May Move HQ

Over the past year, Broc has blogged repeatedly about the importance of Edgar – and its ongoing problems. So we had our fingers crossed when the SEC’s proposed budget for fiscal 2019 included requests for technology modernization & cybersecurity.

And now, the omnibus spending bill that’s supposed to fund the government for the balance of fiscal 2018 increases the SEC’s funding for IT initiatives by a cool $45 million (see pg. 231). There’s also $244 million available to relocate the SEC’s headquarters – a notion that has been floating around for a few years (see this blog) and that the GSA started more seriously pursuing last year.

What’s not in the budget? Well, page 240 says the SEC is prohibited from using funds to finalize, issue or implement any corporate political contributions disclosure requirement (something that’s been stipulated in the past few budget bills). And as far as I can tell, the budget doesn’t permanently rescind the SEC’s Dodd-Frank reserve fund – an idea that was discussed last year. Overall, the SEC’s $1.6 billion budget has remained essentially flat since 2016.

Dodd-Frank Reform: Hensarling Pressures Senate to Negotiate

Here’s an excerpt of this blog by Steve Quinlivan about the “Crapo bill” that the Senate has already passed:

The future of the bill in the House is uncertain. House Financial Services Committee Chairman Jeb Hensarling (R-TX) is seeking to include a “bucket of bipartisan bills” in the legislation which previously passed the House. In a TV interview, Representative Hensarling said: “We have called on the Senate to negotiate. Otherwise, the bill that the Senate passed – which is sitting on the Speaker’s desk – is going to remain on the Speaker’s desk until and unless the Senate negotiates. We are trying to negotiate in good faith. They have to give us some reason –you know, Maxine Waters voted for roughly half the bills we’re trying to negotiate with the Senate….so somebody needs to explain to me why they can’t accept this legislation.”

Some of the provisions Representative Hensarling is seeking to include are discussed in this Forbes article.

Liz Dunshee