The SEC is crafting a proposal that could make it easier for companies to talk to their large shareholders about the way the companies are run without first filing time-consuming, expensive paperwork with the agency. The proposal also would expand the circle of institutional investors that might want to discuss matters of common interest.
The SEC proposal, expected later this year, would let top corporate executives test-market ideas with large groups of shareholders before proceeding. Some examples: reconfiguring the company; altering executive pay plans; or changing certain anti-takeover defenses. Now, companies cannot hold those discussions with more than 10 shareholders without putting all their investors on notice through proxy filings.
``What I would be thinking about is to allow anybody to talk to anybody about anything so long as they don't have a proxy card in hand,'' said Brian J. Lane, director of the SEC's division of corporation finance, which is drafting the new rule.
