The New York Stock Exchange recently announced revisions to NYSE Rule 452. This rule governs discretionary voting by brokers when their clients have not provided voting instructions. Rule 452 permits brokers to vote uninstructed shares on "routine" proposals, but not on "non-routine" proposals.
Under revised Rule 452, the following proposals are no longer treated as "routine:" (i) de-staggering a company's board of directors; (ii) implementing majority voting in director elections; (iii) eliminating supermajority voting requirements; (iv) providing for the use of shareholders consents; (v) providing rights to shareholders to call a special meeting; and (vi) providing for certain types of anti-takeover provision overrides. As a result, companies can be expected to encounter more difficulty in passing these types of proposals since "broker non-votes" will have the same effect as votes against the proposals.
Since most brokerage firms are New York Stock Exchange member organizations, revised Rule 452 will affect companies listed on the New York Stock Exchange, as well as Nasdaq and other national securities exchanges.
NYSE Euronext Information Memo 12-4 (Jan. 25, 2012)