April 16, 2018

Virtual Annual Meetings: Updated “Best Practices”

Like it did back in 2012, Broadridge recently convened a group of 17 different stakeholders to look at the state of virtual annual meetings – both “virtual only” and hybrid. The end product is this set of “Principles & Best Practices for Virtual Annual Meetings.” Like before, the report’s conclusions are not that profound – but can be useful to help guide those considering virtual meetings (and it includes a useful appendix that summarizes each state’s laws governing electronic participation in shareholder meetings).

Shareholder Nominations: A Second Bite at the Apple?

Here’s an excerpt from this Olshan memo (Deason’s complaint is posted in our “Shareholder Nominations” Practice Area):

Now that we are midway into the 2018 proxy season, most deadlines for shareholder submissions of director nominations for upcoming annual meetings have come and gone. Nevertheless, shareholder activists who have missed a nomination deadline for whatever reason should be aware that in certain circumstances they may have a second bite at the apple.

Where a company experiences a material change in circumstances set in motion by its board of directors after the passing of the nomination deadline, the shareholder may have grounds to compel the company to reopen the nomination window if the shareholder can demonstrate that the change in circumstances would have been material to its decision whether or not to nominate directors had it been known at such time. There is already case law in Delaware holding that it is inequitable for directors to refuse to grant a waiver of an advance notice deadline under such circumstances.

In his highly publicized campaign against Xerox, Darwin Deason, the third largest shareholder of Xerox, recently commenced an action in New York State Supreme Court seeking to enjoin Xerox from enforcing its December 11, 2017 nomination deadline based on the Delaware standard on this issue. This Client Alert provides an overview of Deason’s allegations and his legal claim seeking to compel Xerox to reopen the nomination window for him and all shareholders as a matter of New York law. This is a case of first impression in New York and the adoption of the Delaware holding by a New York court would be a major victory for shareholder activists.

However, as a vast majority of corporations are incorporated in Delaware, this Client Alert is also intended to remind shareholder activists who desire to nominate directors after a deadline has passed that material developments triggered by a company’s board that come to light after the deadline may give them grounds to request a waiver of the deadline.

Early Bird Extended to This Friday! Our “Pay Ratio & Proxy Disclosure Conference”

Since so many are scrambling to get internal approval for our discounted rate, we have extended our early bird deadline one week – to this Friday, April 20th! So it’s time to act on this registration information for our popular conferences – “Pay Ratio & Proxy Disclosure Conference” & “Say-on-Pay Workshop: 15th Annual Executive Compensation Conference” – to be held September 25-26 in San Diego and via Live Nationwide Video Webcast. Here are the agendas – nearly 20 panels over two days.

Among the panels are:

1. The SEC All-Stars: A Frank Conversation
2. Parsing Pay Ratio Disclosures: Year 2
3. Section 162(m) & Tax Reform Changes
4. Pay Ratio: How to Handle PR & Employee Fallout
5. The Investors Speak
6. Navigating ISS & Glass Lewis
7. Proxy Disclosures: The In-House Perspective
8. Clawbacks: What to Do Now
9. Dealing with the Complexities of Perks
10. Disclosure for Shareholder Plan Approval
11. The SEC All-Stars: The Bleeding Edge
12. The Big Kahuna: Your Burning Questions Answered
13. Hot Topics: 50 Practical Nuggets in 60 Minutes

Early Bird Rates – Act by the End of This Friday, April 20th: Huge changes are afoot for executive compensation practices with pay ratio disclosures on the horizon. We are doing our part to help you address all these changes – and avoid costly pitfalls – by offering a special early bird discount rate to help you attend these critical conferences (both of the Conferences are bundled together with a single price). So register by April 20th to take advantage of the 20% discount.

Liz Dunshee