April 23, 2020

Virtual Shareholder Meetings: Survey of Q&A Trends

With so many companies moving to virtual meetings, one of the issues that’s become front & center is how shareholder Q&A sessions should be handled. This Bass Berry blog provides some insight into how companies have addressed that issue. The authors surveyed Fortune 100 public companies that filed their proxy statements after March 1, including those that opted for a virtual meeting after filing definitive materials. Of the companies surveyed:

– 6% are permitting stockholders to submit questions only in advance.
– 58% are permitting stockholders to submit questions only at the meeting.
– 32% are permitting stockholders to submit questions both in advance and at the meeting.
– 4% do not clearly address their Q&A in the proxy materials the style of their Q&A sessions couldn’t be determined.

The survey found a few outliers. One company chose to limit in-person attendance to a handful of officers and employees who will deliver proxy votes. Shareholders were encouraged to present questions to financial journalists listed in the company’s annual report, who will choose questions that they consider the most interesting and important. The survey doesn’t identify the company, and I want to respect its privacy as well – so all I can tell you is that its initials are “Berkshire Hathaway.”

The survey identified two other companies that are not permitting live Q&A. One required shareholders to submit questions up to three days in advance, while the other is requiring stockholders to submit their questions in advance only through a portal on the company’s website.

I haven’t seen any survey data on how companies that are holding virtual meetings are dealing with shareholder proposals, but I can tell you that the folks at ValueEdge Advisors are not happy with the way AT&T has chosen to handle them at its virtual meeting.

Listing Standards: NYSE Joins Nasdaq in Providing Relief From Price-Based Standards

Earlier this week, I blogged about Nasdaq’s rule change providing extended compliance periods for companies that fail to meet its minimum bid price & global market cap continued listing standards. On Tuesday, the NYSE received the SEC’s sign-off on a rule change providing similar relief to its listed companies.  This excerpt from a recent Locke Lord blog provides the details:

NYSE-listed companies now have additional time to cure a deficiency if their stock has closed under $1.00 for 30 consecutive trading days. Now, days between April 21, 2020 and June 30, 2020 will not be counted toward the normal 6-month compliance period. Compliance periods will recommence on July 1, 2020 from the point at which they were suspended on April 21.

Listed companies will also have additional time if their average global market capitalization has fallen under $50 million for 30 consecutive trading days at a time when their stockholders’ equity is also under $50 million. These companies would normally have a maximum 18 months to cure the deficiency. These compliance periods are similarly suspended until July 1, 2020.

The exchanges have cut listed companies a lot of slack during the current market turmoil, but the news for troubled companies isn’t all good on the listing front. The blog also notes that Nasdaq adopted rules on the same day that actually shorten compliance periods for particularly distressed companies.

Jackpot! Whistleblower Hits for $27 Million

Well, in the midst of this colossal mess, I guess it’s nice to know that somebody had a good month. Last Thursday, the SEC announced that it had awarded a whistleblower who alerted it to misconduct a whopping $27 million. The SEC’s order lauded the whistleblower’s efforts to “repeatedly and strenuously” raise concerns about the misconduct internally.  The SEC followed this up with a $5 million whistleblower award earlier this week. When it rains, it pours.

John Jenkins