Shareholder activism might hit an all-time high in the upcoming annual meeting season, with investors expected to file a record number of shareholder proposals.
Already, investors have filed 417 proposals on corporate governance issues, compared with 265 at the end of 1994, said Patrick S. McGurn, director of the corporate governance service at the Investor Responsibility Research Center, Washington.
One reason for the jump in activity is the doubling of shareholder proposals - to more than 120 this season - filed by the Investors' Rights Association of America, a grass-roots organization based in Great Neck, N.Y.
"That's more than (organized) labor combined by a multiple of two, so they are far and away the season's leaders," Mr. McGurn said.
The organization is continuing to focus on directors' compensation issues, as it did last year, including asking companies to pay half of directors' annual retainers in stock.
Not all investors' requests will get published in shareholders' ballots. The Securities and Exchange Commission once again is letting companies omit proposals that deal with workplace issues. The SEC stopped giving companies such permission for two years while a federal appeals court decided a dispute with the New York City Employees' Retirement System.
Moreover, because the SEC has broadened the definition of workplace issues, agency officials are letting companies throw out shareholder proposals on a range of issues that companies previously could not have excluded from their proxies.
"The (SEC) staff is going to have the highest batting average in killing proposals," Mr. McGurn noted.