"Devastated" was a term I heard recently used in describing the expectations for the retail vote during this year’s proxy season. This individual is in a pretty good position to judge for his firm provides shareholder services.
The Securities and Exchange Commission recently announced a series of steps to educate investors about proxy voting and support greater investor participation in corporate elections.
The measures include amending the SEC’s e-proxy rules, issuing an Investor Alert, and creating new Internet resources that explain the proxy voting process in plain language. In a statement, SEC Chairman Mary L. Schapiro said, "Investor participation in elections at companies they own is critical to effective corporate governance."
The SEC recently announced that it is reopening for 30 days the comment period with respect to its proposed proxy access rules that were initially released in June 2009. The SEC indicated that by doing so it hopes to solicit input on additional material and data that has been submitted to the public comment file since the initial August 17 deadline.
The SEC’s announcement reflects the many challenging issues that the agency is dealing with in connection with its consideration of proxy access. It is likely that the SEC is committed to mandating proxy access for public companies; however, it is also likely that the final proxy access rules will vary significantly from the rules proposed in June and may include a mechanism whereby public companies, through shareholder action, would be permitted to approve proxy access bylaws that are more restrictive and less shareholder proponent-friendly than the proxy access provisions mandated by the SEC.
What does this mean for corporate planning purposes?
The issue of executive compensation came to mind during the recent World Series. With my beloved Yankees in the Series, I thought back to another time when things weren’t so good for the team. After a decade of mediocrity, the team was infused with new leadership and cash from George Steinbrenner, who bought the Yankees in 1973.
One of the cornerstones of the Yankees’ revival was the acquisition of pitching great Jim “Catfish” Hunter. After a contractual disagreement with the Oakland Athletics in 1974, Hunter became the first free agent of the modern era and signed with the New York Yankees for the then-unprecedented sum of $3.75 million over five years. Yankees fans were ecstatic (one fellow I knew at the time even lobbied his then-pregnant wife to name their son Catfish). However, the contract Mr. Hunter signed did draw criticism as execessive, a complaint that continues to this day given the salaries of today’s ballplayers.
Recently, a client asked if it was time to start thinking about producing
this year’s annual report. My reaction: “Oh, no, not that again…” Yes,
it is time to start thinking about the annual report, not to mention that oftentimes
wailing and gnashing of teeth that accompanies the process.
Given these difficult financial times, just about every company is looking
to produce a quality report at a reasonable cost. Slickly produced and expensive
reports may raise the ire of some shareholders this year; however, it is still
important to produce a report that effectively communicates the company’s story
as well as a review of the year’s performance.
Welcome to IR-IAM’s inaugural post. This space will offer insights, tips and
tricks of the trade for the investor relations professional. We’ll cover the
issues, regulatory changes (and challenges) and news that is important to the
practice of investor relations. We’ll offer straight talk with a touch of irreverence
as we work to inform and interpret and, perhaps, to amaze and surprise. We
hope to bring you things that will make your life easier by helping you make
your CEO happy…