Proposals calling for corporations to include in their materials shareholder nominations for directors — the first time such resolutions will appear in proxy statements at any company since 2007 — could be leading indicators for this proxy season.
“They are clearly the biggest new issue,” said Patrick McGurn, vice president and special counsel, Institutional Shareholder Services Inc., Rockville, Md. “There is no doubt about that. ... It's not 100% new, but as close to it as you are going to get.”
LongView Funds, a unit of Amalgamated Bank, already won a victory at Hewlett-Packard Co. Long-View withdrew its proxy access proposal after the company agreed to include in its 2013 proxy statement a board-approved proposal asking shareholders to vote on proxy access, according to Long-View and HP statements.
The company's proposal will be binding; LongView's was non-binding.
KSW Inc. agreed to provide proxy access following the filing of a shareholder proposal by Daniel Rudewicz and his Furlong Fund LLC, Washington, according to a letter KSW filed with the Securities and Exchange Commission. KSW will allow shareholders that have held at least 5% of its stock for a year to nominate a director. The proposal called for holding 2% for one year. As a result, KSW will exclude the proposal, according to its letter.
In 2007, the last time the SEC allowed proxy access proposals, shareholders voted 43% in favor of access at HP. Only two other such proposals went to a vote that year.
Unlike at HP, a proposal at Nabors Industries Ltd. is set to come to a shareholder vote at the company's annual meeting in June. The $113.7 billion New York City Retirement Systems — employees, fire, police, teachers and board of education pension funds — were the lead filer on the proposal. They were joined as co-filers by the $10.6 billion Illinois State Board of Investment, $144.8 billion California State Teachers' Retirement System, $71.8 billion North Carolina Retirement Systems and $23.2 billion Connecticut Retirement Plans & Trust Funds.
It is the only such proposal filed by a pension fund. The proposal is non-binding. Nabors hasn't yet filed its proxy statement.
In all, proposals were filed at 18 companies as of Feb. 1, calling for shareholders to have access to corporate proxy materials to nominate generally a minority of directors to boards, according to ISS. Many of them were filed by individuals.
Goldman Sachs Group Inc. and Bank of America Corp. are among the other companies targeted with the proposals.
Norges Bank Investment Management filed six access proposals, the largest number of any proponent. Companies at which it filed include Wells Fargo & Co., Charles Schwab Corp. and CME Group Inc.
Last fall, the SEC began allowing shareholder access proposals after a four-year hiatus.