In Focus

Investor Groups Refute Myth of Shareholder Proposal “Overload”

In an October 10 meeting with SEC Chairman Jay Clayton, representatives of CII and other investor groups provided data refuting the notion that shareholder proposals are excessively burdensome for U.S. public companies. Their research on proposals filed in 2004-2017 shows that most U.S. companies do not receive shareholder proposals: On average, 13% of Russell 3000 companies received a shareholder proposal in a particular year. Other findings: Large companies were far more likely to receive shareholder proposals, less than 9% of Russell 3000 companies that had an IPO since 2004 have received a shareholder proposal, and few proposals that receive low votes are resubmitted for a third or fourth time.

CII Urges SEC to Explore Human Capital Management Disclosure

CII, in an October 10 letter to SEC Chairman Jay Clayton, urged the Commission to consider the need for enhanced corporate disclosure of human capital management. CII’s letter follows a petition by an investor coalition to the SEC urging the Commission to adopt standards that would require listed companies to disclose information on human capital management policies, practices and performance. CII’s letter noted that while human capital and talent development “clearly is a key value driver and potentially a key competitive advantage for a company (and a critical risk if mismanaged), many of our members have concerns that public company disclosures in this area are not sufficiently robust.”

Uber Board Reportedly Revokes Super-voting Rights and Makes Other Governance Changes

Uber’s board on October 3 revoked super-voting rights and changed other elements of its governance, according to news reports. The changes pave the way for a near-term investment by Softbank and an IPO in 2019. Uber told reporters the changes would strengthen the board’s independence and “ensure equality among all shareholders.” The voting rights change, which some holders may challenge, limits the influence of founder Travis Kalanick, who continued to exert outsize influence even after he stepped down as CEO, by virtue of his super-voting-rights shares and right to appoint some board members.

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CII Priorities

Fair Financial RulesSensible, effective rules safeguard investors and strengthen markets.

Dual-Class StockEach share of a public company's common stock should have one vote.

Majority Voting for DirectorsIn uncontested elections, directors should be elected by majority vote.

Universal ProxyIn contests, investors should be free to vote for the nominees they prefer.

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