With the so-called universal proxy rule stalled at the SEC since its proposal in late 2016, some investors have been taking matters into their own hands. As The Ticker has previously reported, the SEC proposed amendments to the proxy rules to require parties in a contested director election to provide shareholders with a universal proxy card that includes the names of both management and dissident nominees, which would allow shareholders to vote by proxy for the combination of nominees of their choice.
Under existing rules, management’s director nominees are typically presented as one slate in a company’s proxy statement and proxy card, and the dissident’s full or partial slate of nominees is presented in another. As a result, whereas shareholders voting in person may vote for any combination of nominees, shareholders voting by proxy generally must submit their votes on either the company’s or the dissident’s proxy card and cannot choose a combination of nominees from both cards.
Frustrated with this state of affairs, some investors have been pushing companies to use universal proxy cards. Most recently, Nathan G. Miller of NGM Asset Management asked Destination Maternity Corporation to use a universal proxy card, according to this April 16 Reuters report. Rebuffed, he and another shareholder have proposed their own slate of director nominees using their own proxy statement and proxy card.
Interestingly, one public company, Mellanox Technologies Ltd., is currently attempting to outmaneuver an activist investor by seeking shareholder support to amend its governing documents to require the use of a universal proxy card.