The campaign of New York City Comptroller Scott Springer, on behalf of New York City’s pension funds, to introduce proxy access proposals at 75 different large public companies is well under way, and preliminary indications are that the approval rate of such proposals is resoundingly high.
According to Proxy Monitor, a project of The Manhattan Institute, 15 of 19 proxy access proposals (whether from Mr. Springer or otherwise) introduced at public company annual meetings in May passed. Of the 4 that failed to win, 2 received 49 percent support, 1 46 percent and 1 40 percent. This nearly 80 percent pass rate eclipses the approximately 60 percent pass rate for the 10 proposals introduced in the period between January 1 and April 30, which may be because many earlier proposals originated in part from perennial corporate gadflies rather than the more august office of the New York State Comptroller.
The proxy access proposal passed by wide margins at each of eBay (in May) and Netflix (in June), the two large technology companies that were part of Mr. Springer’s list of 75 targets for the 2015 proxy season and that have held their annual meetings. The annual meeting for Electronic Arts, the third and final technology company on the target list, is set for August.
Four key factors are at play on proxy access:
- A few companies have pre-empted such proposals by unilaterally adopting proxy access purely of their own accord.
- Additional companies have adopted proxy access after having received the proposal from the New York City Comptroller, thereby settling and opting to simply accept the proposal without having it voted upon at the annual meeting.
- Further companies are believed to have had ongoing discussions with large institutional holders wherein they have promised future consideration of such proposals, thereby blunting the ‘yes’ vote.
- The remaining approval votes thus is a subset of companies facing this issue and such companies have chosen either to confront such proposals outright by having the board recommend that stockholders reject them, or have taken an agnostic position and explicitly wanted the stockholders to approve or disprove the proxy access construct.
These results will almost certainly embolden Mr. Springer, who was elected to a four-year term in November 2013 after narrowly edging out a challenge to his incumbency from former New York Governor Elliott Spitzer in a 52 percent/48 percent Democratic primary contest. Mr. Springer has more than two years remaining in his term, and proxy matters, including applying pressure on diversity, climate change and corporate access, have quickly become signature initiatives that have garnered national attention for an otherwise obscure position. Accordingly, it is not hard to imagine that Mr. Springer in the months and years ahead will train his proxy access sights on a much wider swath of companies than the 75 original targets from the 2015 proxy season.