New Report: What to Watch For in 2015 Proxy Season

New York, NY - The 2015 proxy season is upon us and companies are gearing up to face a variety of shareholder proposals at their annual meetings. This season holds significant uncertainty due to a series of recent regulatory decisions. A new report by James Copland, director of the Manhattan Institute’s Center for Legal Policy, employs new data from the Proxy Monitor database to predict what the 2015 proxy season has in store.

What happened in 2014?

• 2014 saw the lowest levels of shareholder support in the ProxyMonitor.org database (dating back to 2006): only 4 percent of proposals received majority support, down from 7 percent in 2013.
• Nearly half (47 percent) of shareholder proposals introduced in 2014 involved social or policy concerns.

What’s different in 2015?

• On June 30, 2014, the federal Securities and Exchange Commission issued new rules that clarified the role of proxy advisory firms and institutional investors in ways that may affect shareholder voting this season.
• In January 2015, the SEC’s Division of Corporate Finance declared that it would not permit any publicly traded companies to exclude shareholder proposals on the basis that they directly conflict with a management proposal, which has led to competing management and shareholder proposals at some companies.

What can we expect this season?

• Numerous proxy access proposals, including the 75 proposals promised by New York City Comptroller Scott Stringer’s Boardroom Accountability Project.
• A shift in sponsorship of proposals to split chairman and CEO roles from labor-affiliated funds to individuals. These proposals have been sponsored exclusively by individuals so far in 2015.
• A continuing array of social- and policy-related proposals, although the Third Circuit’s April 14 decision in Trinity v. Wal-Mart should prevent companies from accepting proposals related to the products of customers and suppliers.

Click here to read the report