It’s not every day that you see a headline saying a company adjourned its annual shareholders’ meeting due to lack of quorum but that’s exactly what happened late last week. According to the company’s press release, at the time the annual meeting was adjourned, proxies had been submitted by stockholders representing approximately 40% of the company’s outstanding stock. Under the company’s bylaws, a quorum consists of a majority of the shares entitled to vote.
Earlier this year, Liz blogged on the Proxy Season Blog about TD Ameritrade’s elimination of discretionary voting. One potential impact of TD Ameritrade’s change is on companies that rely on discretionary votes to reach a quorum. We’ve been hearing that over time more companies may encounter difficulty obtaining enough votes to reach a quorum as a result of the rise in retail shareholders, along with historically lower vote returns from retail holders. For the company impacted, it’s not clear what their mix of shareholders might be but it’s an indicator that lack of quorum could be a reality for some. For now, they’ve engaged a proxy solicitor to help reach a quorum and the meeting is adjourned until August 23.
We’ve got a checklist with considerations relating to “Adjournment & Postponement of Annual Meetings” available here on TheCorporateCounsel.net. It’s available to members for free, check it out in the event you ever find yourself in this situation!
– Lynn Jokela