Pressure from large institutional investors, including public and private pension funds, and other shareholders has led to the widespread adoption of proxy access by large U.S. public companies in the past few years. Proxy access is now mainstream at S&P 500 companies (71%) and is nearly a majority practice among Russell 1000 companies (48%). Proxy access gives shareholders the power to nominate a number of director candidates for inclusion in the company’s proxy materials.
As a follow-up to our previous reports on proxy access, this Sidley Update provides an overview of the state of proxy access in the U.S. as of the end of 2018. Topics covered include:
• The rapid rise of proxy access at U.S. companies since 2015 • Management and shareholder proposals relating to proxy access • Institutional investor support for proxy access • Proxy advisory firm policies on proxy access • Typical parameters of proxy access provisions • The fact that proxy access has never been used in the U.S. (though a second attempt is pending) • Practical guidance for companies considering whether and when to adopt proxy access
This Sidley Update includes an appendix summarizing the proxy access bylaw amendments requested in the fix-it proposals submitted to date as well as details about voting results on the proposals and responses from the SEC Staff to no-action requests to exclude such proposals. It also includes an appendix that highlights, on a company-by-company basis, the various detailed terms of proxy access provisions adopted by 565 companies since the beginning of 2015.
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