Egan-Jones Proxy Services is urging shareholders to sponsor proxy proposals at companies calling for multiple nominees for each seat on a board of directors, Kent S. Hughes, managing director of the firm, announced. Also, the firm will endorse shareholder proposals calling for companies to name as directors only those who receive a majority of shareholder votes; the endorsement is effective with March shareholder meetings and subject to a case-by-case review.
"We have long taken the position that what is commonly termed by issuers an ‘election' of directors is, in reality, only a ratification of a slate chosen by incumbent directors and management, and that such a voting process fails to provide shareholders with meaningful choices," Mr. Hughes said in a statement.
Recent SEC staff rulings that disallow shareholder access to the corporate proxy statement to make nominations "indicate retrenchment regarding mechanisms that it had proposed for permitting shareholders to nominate their own candidates for election of directors," he said.
