In this 20-second video, Cap’n Cashbags – a CEO – just hanging out with his fellow CEO pals who serve on his board’s compensation committee – talks about enhancing his pay package:
How Stock Price Relates to Annual Meetings: Location, Location, Location
Here’s an odd WSJ article – describing a study finding a relationship between stock performance and the location of annual meetings (ie. companies holding their meetings far from home tend to post a 6-month stock performance that trails other companies by anywhere from 3% to nearly 12% and to post weak results in their next quarterly earnings reports). Don’t forget my 80-second video entitled “Annual Shareholder Meetings: Far-Flung Locations? Why?“…
Our “Q&A Forum”: The Big 8000!
In our “Q&A Forum,” we have blown by query #8000 (although the “real” number is much higher since many of the queries have others piggy-backed on them). I know this is patting ourselves on the back, but it’s over 13 years of sharing expert knowledge and is quite a resource. Combined with the Q&A Forums on our other sites, there have been well over 25,000 questions answered.
You are reminded that we welcome your own input into any query you see. And remember there is no need to identify yourself if you are inclined to remain anonymous when you post a reply (or a question). And of course, remember the disclaimer that you need to conduct your own analysis and that any answers don’t contain legal advice.
The hits keep on coming! In this 2-minute video, find out 32 great ways that Prudential Financial (Peggy Foran & her team) enhances the usability of its 2014 proxy statement (with Addison’s help). In particular, check out this infographic about the company’s value creation model – part of its commitment to integrated reporting:
The video above doesn’t address the online version of the proxy statement – which is worth a video on its own!
Exclusive Forum Bylaws: An Illinois Court Weighs In
In this transcript ruling, an Illinois state court dismissed an action brought by purported stockholders of Beam Inc. challenging Beam’s proposed acquisition by Suntory Holdings Limited. The Illinois court ruled that the action was barred by a bylaw adopted by Beam’s board of directors selecting Delaware as the exclusive forum for resolution of certain disputes involving the internal affairs of the corporation. The Illinois court relied heavily on the Delaware Court of Chancery’s decision in Boilermakers Local 154 Retirement Fund v. Chevron Corp., wherein then-Chancellor Strine upheld similar exclusive forum bylaws adopted by the boards of Chevron and FedEx. The Illinois court factually distinguished Galaviz v. Berg, a California federal court case that refused to honor an exclusive forum bylaw adopted by Oracle, but also stated that the Boilermakers decision is “simply more persuasive analytically.”
Courts in New York and Louisiana have also dismissed stockholder actions in reliance on exclusive-bylaws in favor of Delaware.
Transcript: “The Top Compensation Consultants Speak”
We have posted the transcript for the recent CompensationStandards.com webcast: “The Top Compensation Consultants Speak.”
Thanks to Intelligize, here are the most common risk factors during ’13 based on their research looking through both ’34 Act and ’33 Act filings last year:
1. Failure to Compete Successfully
2. Trading Market May Not Develop/Potential Share Price Volatility
3. Dependence on Management Team
4. Difficulty Raising Capital/Insufficient Funding
5. General Economic/Consumer Spending Conditions
6. Failure to Protect Intellectual Property Rights
7. Negative Impact of Changes in Regulations/Policies
8. Dividends May Never Be Paid
9. Principal Shareholders/Management Will Have Significant Control
10. Anti-Takeover Provisions May Prevent a Merger/Acquisition
Here are some runner-ups:
– History of Losses/No Revenue
– Operational Disruptions
– Potential/Current Litigation/Claims
– Dilution in Ownership Due to Future Share Issuances/Conversions
– Failure to Maintain Effective Internal Controls
– Failure to Manage Growth / Expansion Costs
– Integration Challenges from Merger/Acquisition
Too Many Risk Factors vs. Potential Liability: Where Is The Line?
Recently, I blogged – on my “Proxy Season Blog” – about “Will Corp Fin Start Objecting to Too Many 10-Q Risk Factors?” Meanwhile, Doug Greene of Lane & Powell ran this excellent blog on limiting your liability by improving the quality of your safe harbor warnings. I picked his brain by asking: “Now that disclosure reform is being discussed, some investors are complaining about too many risk factors – and I guess perhaps a safe harbor disclaimer that is too much kitchen sink would also be a complaint. How does a company attempt to manage its risk to litigation if only a handful of risk factors is allowed? Think investors want more than just killing the boilerplate.”
Doug responded:
The tension between curtailing risk factors and making them more meaningful is difficult. But it’s possible to harmonize the two goals, and the solution may even be the same: a sharper focus on the company’s real risks and more straightforward descriptions. The problem then becomes how to design and implement a better system for disclosing risks. Companies know their real risks and can plainly describe them, but should we leave them to do it or continue to provide a complex set of instructions? I think that companies, overall, would get it right under a streamlined system.
Dramatic readings are all the rage on YouTube. So to illustrate the silliness of some of the more common risk factors, one of the series on CorporateAffairs.tv features a variety of folks joining together to dramatically read a risk factor. Here are two of them:
To deal with space constraints on voting instruction forms, Broadridge’s Independent Steering Committee recently approved these updated VIF guidelines, updating the original guidelines I blogged about before.
Under the revised guidelines, if Broadridge receives a VIF from a company that has too much language to neatly fit, they will inform the company within 24 hours – and then the company has 3 choices:
1. Direct Broadridge to follow the guidelines about how to pare back the text
2. Submit revised edited language so that it meets the space requirements
3. Request Broadridge to use the lengthy text as originally provided – a Custom VIF – with an extra processing cost incurred
Broadridge Rolls Out More Proxy Cards/VIFs with QR Codes: Mobile Voting Growing Fast for Retail Holders
Recently, Broadridge posted its stats for the ’13 proxy season. Last proxy season, Broadridge rolled out the use of QR codes on proxy card and VIFs, with each QR code being personalized (meaning embedded in the code is the personalized and secure Control Number that is associated with the account’s position). Last year, a handful of companies participated in the pilot – about 1,000 investors used it out of about 1.1 million notices mailed with QR codes printed on them. This proxy season, the number of pilot companies was closer to two dozen.
QR codes appear to be a natural extension of Broadridge’s Mobile ProxyVote since scanning a QR code with a mobile device brings the investor directly to the agenda to vote. Mobile ProxyVote is a version of ProxyVote that is gaining in popularity with about 826,000 accounts voted this proxy season – twice as many as last year. Mobile voting represented about 8% of all positions voted via Broadridge’s Internet platforms for retail shareholders.
Recently, Forbes ran this article entitled “The Broad Reach Of Broadridge, The Most Important Financial Firm You’ve Never Heard Of.”
More on our “Proxy Season Blog”
I continue to post new items regularly on our “Proxy Season Blog” for TheCorporateCounsel.net members. Members can sign up to get that blog pushed out to them via email whenever there is a new entry by simply inputting their email address on the left side of that blog. Here are some of the latest entries:
– Shareholder Proposals: “Enhanced” Confidential Voting Policies & Interim Vote Tallies
– 2013 Foxhole of the Year Winner
– Shareholder Proposals: DTC Changes Its Participant List
– Recap: SEC’s Proxy Advisors Roundtable
– The Role of Shareholder Proposals: Ending Apartheid
– Icahn Tweets Intention to Submit Shareholder Proposal at Apple
In this 2-minute video, find out 21 great ways that General Electric enhances the usability of its 2014 proxy statement (with Addison’s help):
In his blog, Mark Borges has written an extensive 2-part analysis of GE’s proxy statement. And if you missed it, here’s a 2-minute video on the 18 cool things in Coke’s proxy…
Delaware’s New Chancellor: Andy Bouchard
Yesterday, as noted in this article, the Delaware Governor tapped Andy Bouchard to serve as the Chancellor of the Court of Chancery, succeeding Leo Strine in that position. Andy is the managing partner of Bouchard, Margules & Friedlander, a firm he and former Vice Chancellor Stephen Lamb founded in 1996 as a litigation boutique after serving a decade at Skadden. Here’s a BusinessWeek article. Andy will be the 21st Chancellor once confirmed by the Senate…
Transcript: “M&A Litigation: The View from Both Sides”
We have posted the transcript for the recent DealLawyers.com webcast: “M&A Litigation: The View from Both Sides.”
Over the last few weeks, there has been a sudden influx of groups issuing guidelines on shareholder engagement practices. A few weeks ago, I blogged about the new SDX protocol – and now we have a group of three documents from The Conference Board Governance Center:
Here’s my Final Four: Michigan over Virginia in the Final; Wisconsin & Kansas round it out. Just love this GIF of Ben McLemore dancing in the locker room last year…
Our “Shareholder Engagement Checklists”
Some good stuff in those new documents. And we do have a lot of good practical stuff in our own “Shareholder Engagement Checklists”:
Yesterday morning, I got this press release announcing that ISS had been sold by MSCI to Vestar Capital Partners to the tune of $364 million. Drats! Fooled again by a rumor in the mass media as I had blogged last week about another likely purchaser due to a WSJ article.
The transaction is expected to close in the second quarter. ISS will operate independently and the current ISS executive team will remain in place. Here’s a Reuters’ article…
CII’s Letter on Interim Vote Tallies
Concerns about who gets to see interim vote tallies continues. Here is CII’s recent letter to the SEC on the topic. And here is my 4-minute video entitled “Broadridge’s Interim Vote Tally Policies”…
Transcript: “The SEC Staff on International Issues”
We have posted the transcript of the recent webcast: “The SEC Staff on International Issues.”
As noted in its Form 8-K, Hologic is the 2nd company holding its annual meeting in 2014 to fail to gain majority support for its say-on-pay with only 34% voting in favor (down from 65% last year).
With 74 say-on-pay failures in ’13 – more than most folks predicted in last year’s poll – what will this year bring? Please take part in this anonymous poll:
survey services
March-April Issue: Deal Lawyers Print Newsletter
This March-April Issue of the Deal Lawyers print newsletter includes:
– A History Lesson: The SEC’s Office of Mergers & Acquisitions
– A Look Back: Regulation M-A & The “Five-Business” Day Rule
– Still Risky Business: Unlicensed M&A Advisors After the Six Lawyers Letter
– The Board’s Evolving Role in Shareholder Communications
– When You’re Selling the Company, Are You Selling the Attorney-Client Privilege Too?
– “Dual Track” Structure Remains Useful to Strategic Acquirors: Even After DGCL Section 251(h)
If you’re not yet a subscriber, try a 2014 no-risk trial to get a non-blurred version of this issue on a complimentary basis.
Shareholder Proposals: Chevedden Wins Another Lawsuit!
Last week, I blogged about how John Chevedden had won two lawsuits involving his shareholder proposals over the past week. Make that now three – as John has won this “proposal by proxy” decision in a lawsuit filed by Chipotle in a federal district court in Colorado…
John is included in this 1-minute video explaining who “shareholder proponents” are:
Last week, Corp Fin issued a revised statement that lays out its framework for how it considers waiver requests for situations that otherwise might render a company ineligible to qualify as a “well-known seasoned issuer.” Corp Fin decided to tweak the framework after its experience to date…
Wanna Know the SEC Chair’s Schedule? You Can…
One of the stranger things posted on the SEC’s website is a list of all of SEC Chair White’s public meetings for last year. It was just posted under the heading of “Frequently Requested FOIA Documents.” I hadn’t focused on this before but former Chair Schapiro also had her meetings for two of her years in office posted too.
Why are people making FOIA requests for what seems like such mundane information? Anyways, not a whole lot of excitement in Chair White’s days. Lots and lots of meetings with staff. As someone who no longer likes meetings, I can feel Chair White’s pain…
Meanwhile, this Reuters article claims that weak trial witnesses is holding back the SEC…
Bylaws Battle: Dissident Director Compensation
Get up to speed in the battle over whether investors should be able to compensate directors in this 2-minute video:
