Issue link: https://digital.shearman.com/i/1019978
Shearman & Sterling LLP 60 | Shareholder Proposal Season SHAREHOLDER-SPONSORED PROPOSALS — GOVERNANCE "HOT TOPICS" *Through July 31, 2018. **See our discussion on proxy access proposals in Proxy Access – The March Forward Continues but at a Slower Pace in this Survey. 2018 Year-to-Date* 2017 2016 Proposal Type # Props. # Pass Avg. % in Favor # Props. # Pass Avg. % in Favor # Props. # Pass Avg. % in Favor Amend Shareholder Right to Call Special Meeting 48 5 39.8 17 1 45.7 12 1 41.7 Require Independent Board Chair 36 0 32.4 31 0 31.7 38 0 30.1 Authorize Shareholders to Act by Written Consent 34 5 41.9 13 2 44.6 17 1 41.3 Amend Proxy Access** 20 0 28.3 19 1 28.5 11 2 45.5 Adopt Proxy Access** 3 1 35.0 20 11 53.6 32 18 52.5 Adopt Shareholder Right to Call Special Meeting – – – 4 2 44.6 3 0 41.4 TOTAL 141 11 N/A 104 17 N/A 113 22 N/A Special Meeting Proposals There was a significant increase in 2018 in shareholder-sponsored proposals to amend the right of shareholders to call a special meeting, with 48 such proposals being voted on in 2018 compared to 17 in 2017 and 12 in 2016. Most significantly, five proposals in 2018 received a majority vote in favor (compared to one in each of 2017 and 2016). While the average vote in favor in 2018 of 39.8% was lower than the average vote in favor in 2017 and 2016, a significant number of 2018 proposals received a higher level of votes in favor. Specifically, in 2018, 12 proposals received between 45-49% support (compared to three in 2017), nine proposals received between 40-44% support (compared to five in 2017) and 10 proposals received between 35-39% support (compared to five in 2017). Notably, in 2018, John Chevedden and his group submitted 50% of these shareholder proposals. Independent Board Chair Proposals Both the number of, and the level of support for, shareholder-sponsored proposals in 2018, requesting that the board chair be independent was consistent with both 2017 and 2016. None of these proposals passed in 2018 (as was the case in 2017 and 2016) and only six proposals in 2018 received a vote in favor in excess of 40%, compared with eight in 2017 and five in 2016. Written Consent Proposals There was a significant increase in 2018 in shareholder-sponsored proposals to allow shareholders the right to act by written consent, with 34 such proposals being voted on in 2018 compared to 13 in 2017 and 17 in 2016. Most significantly, five proposals in 2018 received a majority vote in favor (compared to two in 2017 and one in 2016). While the average vote in favor in 2018 of 41.9% was lower than the average vote in favor in 2017, 17 proposals received between 40-49% support in 2018, compared with nine in 2017 and 10 in 2016. Notably, in 2016 to 2018, John Chevedden and his group submitted approximately 50% of these shareholder proposals.