Issue link: https://digital.shearman.com/i/1035494
Shearman & Sterling LLP Proxy Access — The March Forward Continues but at a Slower Pace | 43 SHAREHOLDER PROPOSALS "Adopt" Proposals Through June 30, 2018, this year had a much smaller number of shareholder proposals seeking adoption of proxy access as compared to 2017 (22 in 2018 through June 30, 2018 versus 100 through August 31, 2017). Of these "adopt" proposals, which are typically precatory, 13 proposals came to a vote in 2018, compared to 29 in the relevant period in 2017. John Chevedden and James McRitchie and their related proponents remained the most prolific proponents with 12 proposals submitted in the aggregate in 2018, which comprised over 50% of adopt proposals. As was the case last year, the number of shareholder proposals voted on compared to the number submitted remained low because many companies adopted proxy access and negotiated withdrawals of the proposal. Of the shareholder proposals that did come to a vote in 2018, four proposals passed with an average vote in favor of 73%, while nine proposals failed with an average vote in favor of 28%; in each case, the voting percentages in favor are essentially unchanged from last year. The low average vote in favor at several of these companies where proposals failed can be explained by the presence of large insider positions. The decrease in the overall number of "adopt" shareholder proposals was due to a number of factors, including a greater number of companies choosing to adopt proxy access by-laws in the absence of a shareholder proposal and a switch in the focus of individual shareholder proponents from "adopt" proposals to "fix-it" proposals, which seek to amend the terms of a company's existing proxy access by-law. 29 Proposals Voted On (62% Pass Rate) 13 Proposals Voted On (31% Pass Rate) 2017 2018 30% average vote in favor 11 Proposals Failed 72% average vote in favor 18 Proposals Passed 73% average vote in favor 4 Proposals Passed 28% average vote in favor 9 Proposals Failed