On Wednesday, April 18, 2012 Glass Lewis held a Proxy Talk conference call to discuss proxy access shareholder proposals submitted by Norges Bank Investment Management at several companies. Representatives of Norges Bank provided their perspective on the shareholder right to nominate directors and why they have submitted shareholder proposals seeking this right at certain companies.

DESCRIPTION:
Shareholders have sought the ability to nominate directors at US companies without engaging in a proxy contest for many years. The 2010 Dodd-Frank Act gave the SEC authority to adopt rules permitting shareholders to use issuer proxy solicitation materials to nominate director candidates. In August 2010, the SEC adopted final Rule 14a-11, which under certain circumstances, gives shareholders (and shareholder groups) who have collectively held at least 3% of the voting power of a company’s securities continuously for at least three years, the right to nominate up to 25% of a board’s directors and have such nominees included on a company’s ballot and described in its proxy statement.

The SEC’s rule was overturned in a US Court of Appeals for the District of Columbia decision, ruling on a lawsuit brought by the US Chamber Of Commerce and the Business Roundtable. While the SEC decided not to challenge the ruling, companies are no longer able to exclude proxy access shareholder proposals.

Norges Bank Investment Management, as a shareholder in many US companies, has submitted shareholder proposals at Wells Fargo, Staples, CME Group and the Western Union Company seeking shareholder access. The proposals would allow shareholders who have held 1% of the companies’ shares for one year to nominate up to 25% of the companies’ directors. The proposals are filed as by-law amendments and are therefore binding. Glass Lewis will ask Norges Bank about their proposals and why they believe shareholders should support the ability for shareholders to nominate directors at US companies.

To download the recording of this Proxy Talk, click here.

To download a copy of the presentation that accompanies this talk, click here.