WASHINGTON - The American Society of Corporate Secretaries, New York, is pessimistic that current discussions with investor groups will lead to reforms in the shareholder proposal process as proposed by SEC Commissioner Steven M.H. Wallman.
"You can't have a compromise if four disparate groups want everything and don't want to give up anything," said Gwenn L. Carr, corporate secretary and associate general counsel at ITT Industries Inc., New York. She represented the society at a meeting last month with Securities and Exchange Commission officials; she is chairwoman of a subcommittee working on shareholder proposal reform.
Some public pension funds and religious investors want the SEC to stop acting as referee on "ordinary business" matters that companies can use as a reason to exclude proposals from their shareholder ballots; corporations are willing to accept that, but in exchange want to raise ownership levels needed to file proposals. Corporations also want caps on the number of proposals investors can present for a vote.
Investors now need only $1,000 of stock to present a formal request; Ms. Carr would like to raise that level to $50,000. But she said she had not yet discussed that with members of her subcommittee. She also would like to raise the voting levels a proposal receives in order for it to be resubmitted to 5% the first year, 10% the second year and 25% the third. Currently, proposals must receive 3% the first year, 5% the second year and 10% the third year to get back on the ballot.
The suggestions would go far toward ensuring corporations don't get bombarded with proposals that get few votes, Ms. Carr said.