The ultimate outcome of this proxy season, highlighted by hot shareholder proposals on executive compensation and health care, could come in polling places in November rather than at annual corporate meetings, corporate governance experts say.
The November election for president and for congressional seats could determine progress on further shareholder rights from the Securities and Exchange Commission, particularly on shareholder access to use the corporate proxy materials to nominate candidates to boards, they said.
Some of the issues prominent this proxy season will echo in the campaign and in legislation in 2009, said Patrick McGurn, special counsel at RiskMetrics Group Inc., New York.
I think the election will have a significant impact, said Hye-Won Choi, senior vice president and head of corporate governance, TIAA-CREF, New York.
Depending on who is elected president, the election will impact who will lead the SEC, Ms. Choi said. Two of the five commissioner positions are vacant, she pointed out. The election outcome will be important to filling the vacancies and the (position of) chairman and affecting the issue of access, she added. By law, the two vacancies cannot be filled by Republicans to keep a partisan balance on the SEC. The three other positions are now held by Republicans, including Chairman Christopher Cox, who is expected to leave after the November election. Democrats, if they win big in November, could fill three of the five commissioner seats, giving them a majority of the votes on the SEC; otherwise they would have only two seats.
The election also could lead to the enactment of say-on-pay legislation, especially if Sen. Barack Obama, D-Ill., wins the presidency, the experts said.
Mr. Obama sponsored a say-on-pay bill pending in the Senate since last year. A bill sponsored by Rep. Barney Frank, D-Mass., already passed the House.
Sen. John McCain, R-Ariz., if he is elected president, might even sign say-on-pay legislation, because of his statements that support corporate reform, Mr. McGurn said.