Not a member? Subscribe Today | Forgot password?

Remember me

Shareholders

Shareholders Weigh Derivative Suits to Push Governance Change

Jaclyn Jaeger May 15, 2012

A shareholder derivative lawsuit brought this month by the California State Teachers Retirement System—its first ever—against Walmart is creating concern among companies that such suits could become a more common tool to push for governance changes. "The focus of this action, unprecedented in CalSTRS history, is corporate governance reform," said CalSTRS Chief Executive Officer Jack Ehnes.

Proxy Access Efforts Starting Slow

Joe Mont May 15, 2012

Efforts by shareholders to win the right to nominate board members directly haven't fared well so far this proxy season. Many companies successfully petitioned the SEC for permission to ignore proxy access proposals. Of 22 proposals, only three have gone to a vote and all of them lost. Still, shareholder activists say they aren't about to give up the fight. Details inside.

With Pay-for-Performance, It's the Performance That Really Counts

Ashley Studley April 10, 2012

New evidence is emerging that for all the complex calculations that go into tying executive pay to performance, investors view it pretty simply: If they don't like the company's performance, they'll vote against the pay package, details be damned. "Overwhelmingly, it's the criteria investors across the spectrum use to evaluate whether they'll vote for the pay plan," says Tim Smith of Walden Asset Management. More inside.

SEC Speaks on Proxy Access

Karen Kroll March 27, 2012

The SEC's latest batch of decisions on no-action letters offers a bit more insight for companies looking to thwart shareholder proposals about access to the proxy statement. The good news: The SEC did give several companies permission to ignore such proposals. The bad news: Most of those were issued for technical reasons, not any broad attempt by the SEC to limit shareholder proxy access. More details inside.

PCAOB Kicks Off Auditor Rotation Debate

Tammy Whitehouse March 27, 2012

A who's who of the auditing world convened at the Public Company Accounting Oversight Board last week for two days of discussion about term limits for audit firms' engagement with clients. Opinions were predictably diverse, and consensus was rare. Goodyear CFO Darren Wells, for example, said auditor rotation should only be required after an audit failure. More views inside.

Delaware Court to Rule on Exclusive-Forum Bylaws

Jaclyn Jaeger February 22, 2012

Investor activists are waging a courtroom battle this spring against scores of companies that have adopted bylaws designating Delaware as the exclusive legal forum for deciding shareholder litigation. If the Delaware Chancery Court upholds such "forum bylaws," expect more companies to follow suit, says Steven Haas, a lawyer with law firm Hunton & Williams.

Investor Groups File Auditor Rotation Proxy Proposals

Tammy Whitehouse February 07, 2012

Two investor groups recently filed proxy proposals to compel companies to adopt auditor rotation policies. So far, their arguments have fallen on deaf ears. Companies have either ignored the proposals or petitioned the SEC for no-action letters, which they have won. But don't expect the battle to stop there. Details inside.

Proxy Access Moves Forward at Two Companies

Karen Kroll February 07, 2012

Meanwhile, shareholders are having more success with proposals to gain proxy access. So far they have launched proposals to put proxy access to a vote—a process known as private ordering—at 18 companies, and two of those companies are moving toward adopting provisions to allow investors to nominate board candidates. "We're in private-ordering land now. I think we'll be there for the extended future," says Patrick McGurn, executive director at ISS.

Carlyle IPO to Test Mandatory Arbitration in Shareholder Disputes

Jaclyn Jaeger January 31, 2012

The private equity firm Carlyle is testing the bounds of shareholder rights, with a proposal in its upcoming IPO to require arbitration (rather than class-action lawsuits) to settle shareholder disputes. The SEC has yet to rule on that idea, but battle lines are already emerging. "The benefit of arbitration is improving the efficiency of the process," says Douglas Smith, a partner at law firm Gibson Dunn.

SciClone Raises Standards, and Eyebrows, With FCPA Deal

Jaclyn Jaeger November 29, 2011

SciClone Pharmaceuticals, a middle-weight drug development business with only 260 employees, struck a memorable blow for corporate compliance this month: The company agreed to profound changes in its anti-corruption program solely to settle a shareholder lawsuit. "I'm not aware of any other case, certainly in the FCPA area, where this sort of result has occurred," says Lucinda Low of the law firm Steptoe & Johnson.

What to Expect: Preparing for the 2012 Proxy Season

Reese Darragh November 22, 2011

Now is the time, say governance experts, to begin preparing for the 2012 proxy season. Shareholders are expected to focus on chairman and board committee independence, majority voting, political spending disclosure, proxy access proposals, and, of course, compensation. "Investors are going to try to take a harder look at pay levels," says Amy Borrus, deputy director at the Council of Institutional Investors.

How to Avoid a Negative Recommendation From ISS on Say-on-Pay

Reese Darragh August 09, 2011

Proxy advisory firms such as ISS and Glass Lewis may not have the final say on how shareholders will cast their advisory votes on executive compensation, but they sure do hold a lot of sway on how they go. Companies that want to avoid failing a say-on-pay vote may have no choice but to walk the ISS line. "They have become very powerful," says Deborah Lifshey, managing director at Pearl Meyer & Partners.

Say-on-Pay Failures; Say-on-Pay Strategies

Jaclyn Jaeger June 14, 2011

Companies that fail to win say-on-pay votes with shareholders this year—31 of them out of thousands at last count—now face another problem: shareholders suing the directors for disregarding their will. In truth, the lawsuits probably have little merit, experts say. But they do point to how companies might better deal with unhappy shareholders. More inside.

Shareholders Are Getting Their Way on Pay

Arielle Bikard May 03, 2011

As GE's recent restructuring of CEO Jeff Immelt's stock option plan demonstrates, "say-on-pay" is having a dramatic effect on executive compensation. More companies are reviewing their plans and working to better link pay to performance. "This is going to weaken the ability of executives to determine the parameters of their own compensation," Harvard University professor Jesse Fried says. More inside.

Some Cloud Providers Exiting the Business

Jaclyn Jaeger May 03, 2011

As the market for cloud services continues to heat up, some providers are finding the competition is too much to handle. Iron Mountain is the latest to call it quits. Corporate users may welcome the ultra-competitive landscape, but it's just one more reason to choose your provider wisely. More inside.

Controversial Proxy Access Rule Gets Its Day in Court

Arielle Bikard April 05, 2011

The Chamber of Commerce and the Business Roundtable made their best case last week for rescinding the Dodd-Frank Act's SEC proxy access rule in a federal appeals court. The rule, on hold since October, would allow shareholders with at least 3 percent of a company to nominate directors on the proxy.

Pardon the Cliché, but Dialogue With Shareholders Is a Win-Win

Stephen Davis and Jon Lukomnik April 05, 2011

An attempt by companies to communicate more with shareholders on corporate governance topics has been a surprising success—and nearly ubiquitous, according to a recent study. In the last year, 87 percent of companies have reached out to investors. Inside, Columnists Stephen Davis and Jon Lukomnik give some tips for making shareholder outreach work.

Avoid the Dynegy Dilemma; Reach Out to Shareholders

Louis M. Thompson March 15, 2011

It's one of the most bizarre examples of a corporation's failure to convince shareholders to follow management's recommendations: Dynegy's two failed merger plans and the mass resignation of its leaders. Inside, Compliance Week Columnist Lou Thompson reviews the missteps that happened along the way and offers tips on how to avoid a similar fate.

Dynegy Shakeup a Case Study in Shareholder Communications

Jaclyn Jaeger March 15, 2011

Twice this winter, the board and management of Dynegy urged shareholders to accept buyout offers for the company; twice shareholders decided against it, finally prompting Dynegy's leadership to resign en masse last month. Inside, some lessons from those struggles. Also see our related column below.

From Tahrir Square to the Boardroom

Stephen Davis and Jon Lukomnik March 08, 2011

"Fiduciary duty" might not be the phrase that comes to mind while watching news of uprisings across the Arab world, but when you perceive the uprisings as shareholders revolting against mis-governance—well, that should resonate with board directors quite loudly. Inside, Compliance Week Columnists Stephen Davis and Jon Lukomnik outline how corporations can prevent similar revolts here at home.

More to 2011 Proxy Season Than Just Say-on-Pay Votes

Melissa Klein Aguilar March 01, 2011

Proxy season is here again and shareholder advisory votes on executive compensation are the main focus at many companies. But plenty of other issues can trip up boards and management, too. "A lot of activists are re-tooling their campaigns to go after Dodd-Frank [Act] leftovers," says Patrick McGurn of Institutional Shareholder Services.

Euro-Shareholder Trend: Throwing Stuff at Board Members

Bruce Carton May 13, 2009

When Flemish shareholders of Fortis revolted at a heated meeting in Ghent, Belgium last month by throwing shoes, coins and even ballot boxes at Fortis board members, I was willing to dismiss it as an isolated incident. (See the video below!)After today's developments in Dublin, Ireland, however, I think it...

Compliance Week Podcasts ...

Every week we chat with leading thinkers in compliance, auditing, risk management, public policy and more. These short (10-15 minutes) interviews are free to all. Follow Compliance Week podcasts on iTunes.

Compliance Week LinkedIn Group

Compliance Week now has a companion group on LinkedIn, where members can network and discuss the compliance and governance news of the day. Open to all compliance professionals, free to join.

Survey of the Week

Deloitte is conducting their annual Look Before You Leap: Managing Risks in Global Investments survey to better understand the approaches companies are taking to address compliance and integrity-related risks in emerging markets.