In Focus

SEC Proposes Universal Proxy Cards

The SEC on October 26 proposed a requirement  for universal proxy cards in proxy fights, and for clarified disclosure of voting choices in all director elections.  The Council of Institutional Investors (CII) welcomes the SEC’s proposed rule changes to require the use of “universal proxy” cards in contested elections for director at U.S. public companies, and to require clarity on voting standards in all director elections. CII has long supported the use of universal proxy cards, and petitioned the SEC in 2014 to amend its rules to require them.  CII in June 2015 petitioned the SEC to provide guidance for disclosure on the method by which votes are counted in director elections.
“We are very pleased with the proposal for universal proxy cards as described at today’s SEC open meeting,” said CII Executive Director Ken Bertsch. “Currently, when there is a contest, investors voting by proxy are effectively disenfranchised because they have no practical ability to vote for the combination of management and dissident nominees they believe best serve their economic interests. Universal proxy cards level the playing field for investors voting by proxy, so they have the freedom of choice to vote for the director candidates they prefer.” 

Delaware Vice Chancellor Calls on Investors to “Take Back the Vote”

Delaware Vice Chancellor Travis Laster told CII Fall Conference participants that the complex beneficial-nominee system continues to cause problems related to voting, and that solutions may be near through distributed ledger technology, the best known versions of which are called “blockchain.” Distributed ledger technologies offer a solution that would provide “better accuracy, greater transparency, and superior efficiency for settling securities trades and voting in corporate elections,” he said. A paper providing the basis for his remarks was released October 18 by CII.

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CII Priorities

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

Executive Compensation CEO pay should be transparent and tied to long-term performance.

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

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