 |
||||||
| Tuesday, February 9, 2010 |
Contact Us
|
 RSS
|
|||||
|
|
| |
|||
|
||||||
|
||||||
|
|
ANALYSIS
March 2, 2009
Sagging Index no longer reflects what’s going on in the market, some say, Replacements? Google it, to start.
March 2, 2009
Downward price spiral will actually boost the cost of capital for most companies. CFOS, take note.
March 2, 2009
The latest bailout at AIG could be a preview of how the president will deal with Wall Street.
March 2, 2009
No corporate defaults. Big debt offerings. Percolating CP issuance. Things may be looking up in the capital markets.
|
|
|
|
December 3, 2007 12:01 AM ET
Bloomberg
LONE VOICE Commish Annette Nazareth favors proxy access.
The 3-1 SEC vote, with Democratic commissioner Annette Nazareth dissenting, codified the agency's previous position that corporate bylaw proposals to allow shareholders to nominate directors can be excluded from proxies by company management. Last year the SEC's position was struck down by a federal appellate court that said the SEC could not indiscriminately reverse its 1990 position—allowing proxy proposals—without sufficient public justification. During an open meeting on Nov. 28, SEC chairman Christopher Cox called the latest rule “a status quo proposal—nothing more and nothing less.” Mr. Cox said a June decision by the U.S. Supreme Court also added confusion by curtailing how federal agencies could change interpretations. The vote was all but preordained, and now the SEC is working to revisit the issue, perhaps as early as next spring. Mr. Cox told reporters he was already working on expanding shareholder access, adding that he hopes a proposal will be finalized by next November, in time for the 2009 proxy season. “We'll be back,” he vowed. Missing from the open meeting was a vote on a proposed New York Stock Exchange rule change that would prevent brokers from voting in place of shareholders on director elections. Some industry watchers expected the commission to back the Big Board proposal as a consolation to shareholders for curbing proxy access. (See “SEC's Cox Expected to Stop Broker Voting for Shareholders,” FW, Nov. 26.) Sources said broker voting was tabled until 2008. Proxy access is nothing new to the SEC, and has been an on-again, off-again issue for years. In July, the SEC floated two proposals on the proxy process: one that would have expanded shareholder access and one that would curtail it. Mr. Cox had voted for both, and said his support last week for the “no-access rule” was designed as a fail-safe to prevent shareholders from circumventing SEC disclosure and anti-fraud rules. That's because the 2006 decision by the 2nd Circuit Court of Appeals determined all the proxy contest rules, including anti-fraud and disclosure requirements, were invalid, he said, which would have led to a “Wild West” of legal uncertainty if the SEC didn't vote on the no-access proposal. Such a situation may still come to pass, though. The American Federation of State, County and Municipal Employees—which fought and won the 2006 case—submitted two proxy access proposals last week to J.P. Morgan Chase and Bear Stearns. Richard Ferlauto, AFSCME director of pension investment policy, said the union has “lots more” proxy access proposals waiting in the wings and is ready to challenge company exclusions in the 2nd Circuit. If the issue is brought back before the 2nd Circuit, it could evoke a replay of the 2006 court decision that invalidated the SEC's position in the first place, said Kurt Schacht, managing director of the CFA Institute. He pointed to the recent court losses the SEC suffered on procedural grounds in the mutual fund and hedge fund arenas, noting this could be another legal loser for the agency. “I don't think investors will give up on this issue, especially since executive compensation is seen as rampant,” Mr. Schacht said. Mr. Ferlauto and AFL-CIO counsel Damon Silvers had a bleak outlook on the future of proxy access under Mr. Cox's tenure. Mr. Ferlauto called Mr. Cox a “lame duck” without the power to push through a shareholder-friendly rule, and Mr. Silvers said the SEC has shown its true political colors in the vote. Ms. Nazareth, the sole Democrat on the commission and the only vote against the proposal, voiced frustration and disappointment. “It stands in the way of shareholder rights,” she said, noting that if the SEC truly wanted to preserve its disclosure and anti-fraud rules, it should have addressed those specifically without restricting proxy access. She called the vote “an unfortunate step backwards” for shareholder rights. Further, Ms. Nazareth questioned why the rule did not include a sunset provision to allow it to expire, and said the June Supreme Court decision was never mentioned during the Commission's July open meeting to propose the proxy access rules. She also disagreed with Mr. Cox's assertion that the current state of affairs is one of confusion. “There was no flood of proposals” after the 2006 2nd Circuit decision, she said, and there hasn't been an outpouring of confusion in comment letters. Republican commissioner Kathleen Casey said she'd be open to revisiting proxy access, but said if the intent is to expand shareholder rights and limit corporate rights, such a decision should be made at the state level, not by the SEC. The business community hailed the SEC vote. Tom Lehner, director of public policy at the Business Roundtable, said union litigation threats are unproductive. He also said the SEC should finalize rules on broker voting before revisiting proxy access in 2008. On Capitol Hill, Democrats were forlorn about the outcome. House Financial Services Committee chairman Barney Frank (D-Mass.) said the decision “will leave shareholders with inadequate recourse to influence insular boards that are unresponsive to shareholder concerns,” adding that the proposal was rushed and piecemeal. Sen. Christopher Dodd (D-Conn.), who chairs the Senate Banking Committee, said he wanted the SEC to move on the issue only when it had a full complement of commissioners. The banking committee is in charge of submitting names for possible replacements, and the Senate recently sent nominee suggestions to the White House. Although the vote is a setback for unions and shareholder groups, they can use the SEC's new electronic proxy rules to put forth their own slates of directors, said Ray Russo, a partner with Paul Weiss. However, such a process would be much slower, more costly and less effective than trying to change a company's rules to allow shareholder-nominated directors to be included on the company's own proxy ballot, he admitted.FW
|
|
|
|
Latest News
• Reversal? Stanford advisers sue the SEC
March 5, 10:52 AM EST
• Third of companies not complying with new tax reporting rule
March 4, 4:25 PM EST
• Regulators aware of problems at First National for six years: audit
March 4, 3:31 PM EST
• Influential advisory group to look at fair-value, off-balance sheet accounting
March 4, 4:16 PM EST
• In a first, NY State hopes to sell bankrupt insurer
March 4, 3:59 PM EST
CRAIN'S BENEFITS OUTLOOK 2009
SPECIAL REPORT
MOST POPULAR
|
MORE ANALYSIS
Crain Financial Group:
InvestmentNews |
Pensions & Investments |
Workforce Management
Copyright ©2010 Crain Communications Inc
All rights reserved.
Privacy Policy |
Terms & Conditions