We’re kicking things off today in Las Vegas with our “Proxy Disclosure Conference” and we’ll follow that up tomorrow with our “22nd Annual Executive Compensation Conference.” The agendas for our conferences include 15 substantive panels over 2 days – as well as a discussion about the SEC’s regulatory agenda between two former senior SEC staff members, our own Dave Lynn, former Chief Counsel of the Division of Corporation Finance, and Skadden’s Brian Breheny, former head of the SEC’s Office of Mergers and Acquisitions and its former Deputy Director, Legal and Regulatory Policy. Here’s what’s on tap for today.
We’re very excited to see everyone in Las Vegas, but if you can’t be here in person, you can still register to attend today’s program and tomorrow’s “22nd Annual Executive Compensation Disclosure Conference” online by visiting our online store or by calling us at 800-737-1271. Our conferences are bundled together into a single two-day event for registration and pricing, so your purchase will cover both events.
– How to Attend Online: Our conferences are hosted online through the RingCentral Events platform. When you register for the conferences, you’ll receive a registration confirmation email that will contain your personalized “Magic Link.” Just click on that link to be instantly directed to the event. The Magic Link acts as an “access pass” into the event. It is unique to you and cannot be shared with others. It bypasses the need for registered users to sign into RingCentral Events and brings you directly into your RingCentral Events account and into the event.
Once in the event, click the “Stage” button from the menu on the left of the webpage. In order to view the session currently playing on stage, you will need to press the play button on the video. If you need technical assistance, members of our team will be available within the platform and via email at info@ccrcorp.com to assist you throughout the conferences. If you need technical assistance, members of our team will be available via email at info@ccrcorp.com to assist you throughout the conferences.
– Access to Archives & On-Demand CLE: Your registration includes access to the conference archives, which will be available until October 23, 2025 – but you’ll need your confirmation email to access them so be sure to retain it! One big reason to make sure you do that is that if you can’t attend the conferences live, you may earn on-demand CLE credit by viewing the archives. See these “CLE FAQs for Archived Conference Sessions (ON DEMAND)” for more information.
– Thanks to Our Sponsors! A huge “thank you” to our sponsors who have helped make these events possible. Our platinum sponsor for this year’s conferences is Goodwin, our gold sponsor is Ballard Spahr, our silver sponsors are Cooley, King & Spalding, Kirkland & Ellis, Latham & Watkins, Morrison Foerster, O’Melveny, Sidley, Troutman Pepper Locke, and Wilson Sonsini – and a special shoutout to our breakfast roundtable sponsors Cleary and Dragon GC. We are extremely grateful for their support of these fine law firms and businesses and invite you to join them in sponsoring next year’s conferences.
Finally, in honor of our host city, here’s today’s Fear and Loathing in Las Vegas quote:
“There’s a big … machine in the sky, … some kind of electric snake … coming straight at us.”
White & Case recently published a survey of publicly filed insider trading policies. One of the topics addressed was the frequency with which policies addressed the issue of “shadow trading.” This excerpt describes the survey’s findings:
“Shadow trading” is the practice of an insider trading shares of another company that is “economically linked” to the insider’s company, while in possession of MNPI about the insider’s company. Companies are “economically linked” when the MNPI about the insider’s company could influence the market price of shares of the other company. This issue came to the fore in SEC v. Matthew Panuwat, when the SEC successfully prosecuted an insider trading case based on shadow trading.
Companies may want to reconsider the extent to which their insider trading prohibitions apply to securities of other companies, considering the potential reputational consequences of an insider trading action. 20% of companies surveyed specifically prohibit “shadow trading” by insiders, which was an increase (by 2%) from what we saw in our 2024 survey.
Note that most companies’ insider trading policies already explicitly apply to trading in the securities of the company’s customers, suppliers, and strategic partners etc., based on any information about such other companies learned through the individual’s employment. This concept is drafted more narrowly than the concept of shadow trading.
Other topics addressed in the survey include the prevalence and duration of quarterly blackout periods, persons subject to quarterly blackouts and preclearance policies, and how hedging and pledging, exchange funds, and gifts are addressed.
The September-October issue of the Deal Lawyers newsletter was just sent to the printer. It is also available online to members of DealLawyers.com who subscribe to the electronic format. This issue includes the following articles:
– Integrated Agreements: It’s Not Always About Conflicts
– Biotech Spin-Off Transactions
– New State Notification Requirements for Mergers and Acquisitions
– Advance Notice Bylaws: Delaware Court of Chancery Gives Dissidents Another Bite at the Apple
– Renewal Season is Here! Is It Time to Renew Your Membership?
The Deal Lawyers newsletter is always timely & topical – and something you can’t afford to be without to keep up with the rapid-fire developments in the world of M&A. If you don’t subscribe to Deal Lawyers, please email us at info@ccrcorp.com or call us at 800-737-1271.
ExxonMobil’s recently announced retail voting program has prompted a negative reaction from certain segments of the corporate governance industrial complex, so I guess it was inevitable that somebody would eventually cobble together a lawsuit challenging the program. According to this Investment Executive article, “eventually” is now:
The City of Hollywood Police Officers’ Retirement System has filed a proposed class action in U.S. district court on behalf of Exxon shareholders, against the company and its board of directors, alleging that they are breaching their fiduciary duties in connection with the company’s adoption of its “retail voting program.”
The program, which was approved by the U.S. Securities and Exchange Commission (SEC) last month, enables the company to automate retail investors’ votes in favour of management.
The proposed lawsuit is seeking an injunction to prevent the company from introducing the program, which it alleges infringes on shareholders’ voting rights and is designed to stifle shareholder dissent and entrench management.
It argues that the program impairs the voting rights of shareholders that opt into the program, “based on inadequate disclosures.” It also argues that the votes of shareholders that can’t or don’t opt in will be diluted.
By adopting the program, the lawsuit alleges that the company’s directors breached their fiduciary duties.
“By attempting to weaponize a largely disengaged body of retail shareholders … the [program] affirmatively violates federal law, and constitutes both an unlawful entrenchment device and a breach of fiduciary duty under New Jersey law,” the plaintiffs’ filing alleged.
As I mentioned in my earlier blog, I was already planning to enroll in any similar program that the companies I invest in offer, but now that I know I’m allegedly being “weaponized,” I’m even more eager to sign up. I’ve never been weaponized before, and frankly, it sounds kind of sexy. (I don’t get out much.)
It didn’t take long for Prof. Ann Lipton to flag one of the potential problems with this lawsuit – the uncertainties concerning whether shareholders have a right of action to bring claims alleging violations of the proxy rules. I don’t know all of the intricacies about implied private rights of action, but my guess is that this is very much a live issue in the case. The federal courts haven’t been kind to claims asserting private rights of action under Rule14a-9 in recent years, and to the extent that other provisions of the proxy rules are claimed to provide such a right, my guess is that they’ll be equally skeptical.
By the way, check out this blog from Broc Romanek highlighting a Cooley Alert that contends some of the arguments asserted against Exxon’s program are misleading.
As far as public sector and public sector adjacent jobs go, being a PCAOB director is a pretty lucrative gig. Currently, the PCAOB’s Chair makes $673,000 and the other board members make $574,000. If you think that’s a lot of money, you’re not the only one – SEC Chairman Paul Atkins thinks so too. In fact, he thinks it’s too much money. In a July 2025 statement soliciting PCAOB board candidates, he criticized the growth in the PCAOB’s budget in recent years and set his sights squarely on board member compensation, noting that “an evaluation of Board member compensation will be among the items the Commission considers in connection with its review of the Board’s 2026 budget.”
According to an article in Friday’s WSJ, the PCAOB appears to have gotten the message in preparing its fiscal 2026 budget:
The Public Company Accounting Oversight Board has proposed a 20% cut to the salaries of its board members as it faces scrutiny from the Securities and Exchange Commission over compensation levels.
The cut was part of a preliminary 2026 budget the U.S. audit regulator submitted to the SEC in recent weeks, people familiar with the matter said. The plan suggests shrinking the overall budget by roughly 10% from the anticipated 2025 amount. This year’s spending is expected to come in below the $399.7 million the SEC approved last year.
The SEC, which oversees the PCAOB, has until Oct. 31 to propose revisions to the preliminary budget, followed by an audit-board vote in November and SEC vote in December, according to SEC rules. The process could be delayed by the government shutdown.
Is this cut big enough to satisfy Chairman Atkins & his colleagues? I don’t know, but it is worth noting that even with the proposed cuts, the WSJ article says that PCAOB board members would still be much more highly compensated than their counterparts at the SEC. It cites 2022 figures showing that Atkins’ predecessor, Gary Gensler, earned about $168,000, while commissioners Caroline Crenshaw and Hester Peirce earned roughly $158,000.
All things considered, I think I’d prefer to be the head of the other SEC – the Southeastern Conference. According to media reports, that SEC Chairman, Gary Sankey, earns $4 million a year.
If you’re traveling to Las Vegas today for our “Proxy Disclosure and 22nd Annual Executive Compensation Conferences,” be sure to join us at 4 pm in the Primrose Hallway at The Virgin Hotels for a casual evening reception celebrating CCRcorp’s 50th anniversary. You’ll be able to collect your credentials for the PDEC Conferences, network with other 2025 PDEC attendees and sponsors, and enjoy complimentary drinks, appetizers and entertainment – plus a celebratory toast to 50 years of our corporate counsel resources!
There’s still time to register to attend our PDEC Conferences in person or virtually. Just email us at info@ccrcorp.com, call us at 800-737-1271, or visit our online store. We look forward to seeing you there!
Still not sure if you want to attend? Well, we’ve given you plenty of our own sales pitches over the past several months. Now, we ask that you consider some advice from an independent third party:
“Buy the ticket, take the ride…and if it occasionally gets a little heavier than what you had in mind, well…maybe chalk it up to forced consciousness expansion. . .” – Hunter S. Thompson, Fear and Loathing in Las Vegas
While the SEC’s climate disclosure rules remain bogged down in a litigation quagmire, the California Air Resources Board (CARB) continues its efforts to implement California’s own climate disclosure regime (even though those requirements are also the subject of ongoing litigation). Last month, CARB released a preliminary list of over 3,100 companies that could be subject to upcoming reporting requirements under either SB 253 or SB 261.
Last Friday, CARB released a draft reporting template for those companies that will be required to report their Scope 1 and Scope 2 emissions under SB 253 beginning next year. The draft template states:
The template is intended to streamline reporting, especially for entities disclosing GHG emissions for the very first time. Reporting entities are not currently required to use the template; its use is voluntary for the 2026 reporting cycle. CARB will provide guidance on later reporting cycles as part of its regulatory process. CARB is seeking input on this draft template to help CARB further refine the template.
CARB invites reporting entities and other stakeholders to review the draft template and provide feedback on its structure, substance, and alignment with SB 253’s overarching objectives.
The template is organized into the following sections:
– Organization Information
– Third-Party Verification
– Inventory Boundary
– Scope 1 and Scope 2 Disclosure
– Methodology
– De Minimis / Minor Sources
– California MRR Fields (if applicable)
– Emission Reductions (if applicable)
The template also includes optional fields for future reporting years as CARB further develops the program. These optional fields include base year emissions to support intraorganizational comparison, providing more transparency to investors and stakeholders.
CARB is seeking comments on the draft reporting template, either through the public docket that will remain open through October 27, 2025, or by email to climatedisclosure@arb.ca.gov.
In a notice posted on its website this week, the California Air Resources Board (CARB) indicates that final regulations that were expected to be issued this week will now be delayed until the first quarter of 2026. The notice states:
Following the California Air Resources Board’s (CARB) August 2025 workshop, CARB staff have made available public resources to solicit feedback from stakeholders, including a Climate-Related Financial Risk Report Checklist (09/02/25), a preliminary list of regulated entities and voluntary stakeholder survey tool (09/24/25), and a draft reporting template for Scope 1 and Scope 2 GHG Emissions (10/10/25). Given the large volume of public comments staff have received, and given ongoing input related to identifying the range of covered entities, CARB is proposing an updated timeline for bringing the initial rulemaking (including the fee-related provisions) to the board in Q1 2026. CARB is continuing to take feedback on the draft reporting template for Scope 1 and Scope 2 GHG emissions at CARB’s public docket through 10/27/25. Feedback related to the preliminary list of covered entities can be submitted through an online survey. Other comments or inquiries can be submitted to Climatedisclosure@arb.ca.gov.
The CARB notice does not indicate that the compliance dates for companies will change, even though the work on the regulations remains ongoing. Those companies who are required to make climate disclosures under SB 261 are still expected to submit their reports by January 1, 2026, while those companies that are covered by SB 253 are expected to report their Scope 1 and Scope 2 emissions by June 30, 2026.
One of the sessions at the 2025 Proxy Disclosure Conference that I was really looking forward to was my interview with Sebastian Gomez Abero, who serves as Acting Deputy Director for Legal and Regulatory Policy and Associate Director in the Disclosure Review Program in the SEC’s Division of Corporation Finance. Unfortunately, the government shutdown has made it impossible for Sebastian to join us at the conference.
But the show must go on! We will now open the Proxy Disclosure Conference with a new session, “Dave Lynn & Brian Breheny: Former Corp Fin Staff on Corp Fin’s Agenda,” during which Brian Breheny from Skadden and I will discuss the priorities of the Division of Corporation Finance at the SEC and what those priorities mean for you. This promises to be an interesting and lively conversation about all that is going on in Corp Fin that you do not want to miss!
Yesterday, Glass Lewis issued a major announcement about what it calls “substantial enhancements to its business model.” Glass Lewis points out that these enhancements are made possible by technological advancements, in particular AI and smart technology that enables customization of its proxy voting advice. The announcement notes:
Over the next two years, Glass Lewis plans to make two significant changes to the way it applies proxy voting policies and delivers its highly-regarded proxy research and voting recommendations.
First, Glass Lewis will help all clients move beyond standard policies, guiding them in creating voting frameworks that reflect their individual investment philosophies and stewardship priorities. A majority of the firm’s clients already use their own custom policy guidelines or a specific thematic policy. The goal is to enable all clients to vote according to their own policies.
Second, Glass Lewis will move away from singularly-focused research and vote recommendations based on its house policy and shift to providing multiple perspectives that reflect the varied viewpoints of clients. While still under development, the spectrum of perspectives could range from one that leans toward management and others that reflect more governance fundamentals. Beginning in 2027, clients will be able to access any or all of these perspectives to inform their proxy voting decisions.
“Technology has advanced enough now to allow us to apply smart technologies and AI in particular to complex proxy voting processes,” said Mann. “With these tools, Glass Lewis is modernizing proxy voting practices, removing the perception of influence, and transforming proxy voting into a more strategic and client-driven experience.”
The abandonment of benchmark voting policies in favor of more bespoke voting advice could potentially complicate the proxy voting and engagement environment, as companies try to determine how investors will vote on specific proposals and director elections. At the same time, the technology-enabled move to more tailored voting advice could ultimately result in more moderate (and less extreme) voting policy outcomes. In any event, the move by Glass Lewis is big news for the proxy advisory business, as well as for companies and investors.
