Issue link: https://digital.shearman.com/i/1035494
Shearman & Sterling LLP Proxy Access — The March Forward Continues but at a Slower Pace | 47 FAST FACTS TIME FROM ADOPTION TO AMENDMENT Among the 37 companies that have amended their proxy access by-laws, there was an average of 311 days between the initial adoption of the by-law and an amendment More than 900 annual meetings have been held by companies with a proxy access by-law since 2011 Only 1 nomination has been attempted (and was disqualified by the company in question) ZERO proxy access candidates have appeared in a company proxy statement THE RATE OF EXCLUSIONS/ WITHDRAWALS OF PROPOSALS DECLINED PRECIPITOUSLY IN 2018 AS COMPARED TO 2017 AMENDMENTS To date, 37 companies have amended their proxy access by-laws, although only one of these amendments occurred in 2018. While some amendments have been made prior to an upcoming vote on an "adopt" or "fix-it" proposal and some have been made in response to shareholder proposals that have passed, it is likely that at least a few amendments have been made in response to behind-the-scenes pressure from institutional investors seeking more favorable terms. EXCLUSIONS AND WITHDRAWALS The rate of exclusions/withdrawals of shareholder proposals declined precipitously in 2018 as compared to 2017 (from approximately 70% to approximately 20%). In 2018, among the 28 "fix-it" proposals, one was excluded and one was withdrawn. Among the 22 adopt proposals in 2018, six were excluded and three were withdrawn. This decline in withdrawals/exclusions may be attributed to a refinement in shareholder proposals prior to submission, leaving a pool of proposals less vulnerable to exclusion and withdrawal. For example, the decline in "fix-it" proposals can be attributed to the SEC's decision in 2017 to generally allow companies to exclude "shareholder cap" proposals requesting an increase to 40 or 50 shareholders under Rule 14a-8(i)(10), so long as the company's proxy access by-law already had an aggregation cap of 20 shareholders and the company could represent as to certain facts about its shareholder base.