The balance of power between incumbent boards and institutional shareholders has fundamentally shifted as a result of recent developments with respect to public company director elections, and more changes are on the way. For example:
- On July 1, 2009, the SEC approved an amendment to NYSE Rule 452 that eliminates broker discretionary voting in director elections. For companies that have adopted a majority voting standard, this amendment will make it difficult for directors to achieve reelection without support of a majority of shares held by institutional investors such as large public pension funds and mutual funds.
- Pending legislation and SEC rulemaking are likely to require shareholder access to company proxy statements for insurgent director nominees, along with nonbinding shareholder "say-on-pay" votes with respect to executive compensation. These changes to the proxy and voting rules are one aspect of a historic shift toward greater federalization of corporation law in the United States.
This teleconference will address these and other recent and pending actions and legislation, as well as such questions as:
- What will these changes mean for incumbent directors of public companies?
- Are there legal pitfalls to watch out for as communications between directors and institutional shareholders increase?
Join Corporate & Securities partners James Carlson and Eric Finseth for this 30-minute teleconference, the next in our continuing series.
Mayer Brown's Global Financial Markets Initiative helps clients deal with the legal and business challenges resulting from the ongoing turbulence in worldwide financial markets. By mobilizing the firm's global resources from multiple practices and offices, the Initiative provides clients with knowledgeable and timely counsel on a broad spectrum of their legal needs.
Visit Mayer Brown's Financial Market Distress - Resources site for a compilation of links to the latest documents issued by regulatory and other governmental agencies worldwide, and additional commentary by Mayer Brown. Please bookmark it and check back often to stay informed on this rapidly evolving situation.