At its open meeting on July 1, the Securities and Exchange Commission voted 3-2 to approve the New York Stock Exchange’s proposed rule change to amend NYSE Rule 452 and corresponding Listed Company Manual Section 402.08 to eliminate broker discretionary voting for the election of directors of NYSE-listed companies with the exception of companies registered under the Investment Company Act of 1940. Supporters of the proposal see it as a way to empower shareholders by preventing uninstructed broker voting in elections of directors. The two commissioners who voted against the proposal had several concerns, including that although the change applies solely to the NYSE, it may have broader effects, particularly for retail investors, that have not been closely analyzed.
The rule change, described in the March 6 edition of Corporate and Financial Weekly Digest, will be applicable to proxy voting for shareholder meetings held on or after January 1, 2010.
The archived webcast of the meeting will be available here.