According to a Bureau of National Affairs interview with Securities and Exchange Commission spokesman John Nester, SEC Chairman Mary Schapiro has directed the SEC’s staff to draft proposals permitting shareholder access to issuers’ proxy statements for director nominees. The SEC’s current rules, which permit issuers to exclude stockholder proposals relating to director nominations from their proxy materials, were adopted in November 2007 under then-Chairman Christopher Cox. Earlier, Chairman Cox developed two alternative proposals: one which would have permitted investors holding at least 5% of an issuer’s stock to file proxy access by-law proposals; the other, which was subsequently adopted, is the SEC’s current rule. The details of the new proposal, including whether the “intermediate” step of a by-law provision will be required, have not been revealed.  

Proxy access is also being considered by Delaware’s lawmakers. A Delaware corporate bar proposal would permit a Delaware corporation to adopt a by-law requiring any proxy solicitation materials circulated by the corporation regarding the election of directors to include nominees submitted by stockholders, in addition to those submitted by the corporation. The proposed legislation would permit the by-law to include minimum ownership requirements as well as a list of other qualifications that a stockholder must comply with in order to nominate a director. Whether the SEC’s new rules will preempt Delaware’s proposed corporate law amendments may depend upon whether the SEC’s new proposals specifically allow for state law preemption, as was the case in the earlier SEC proposal.  

BNA Securities Regulation & Law Report 3/16/09 (Vol. 41, No. 11)