Nasdaq Conducts Survey of Potential Limits on Golden Leash Payments
The debate continues over the propriety of “golden leash” payments by third parties to directors in connection with service on public company boards. In light of this debate, Nasdaq is seeking comments from listed companies, investors and others about whether or not Nasdaq should “adopt rules to either prohibit directors that receive third-party payments from being considered independent directors under Nasdaq rules or from serving on the Board at all” (emphasis added).
BlackRock Urges Public Companies to Disclose Long-Term Strategic Framework
For several years, leaders at S&P 500 companies have received a letter from Larry Fink, the CEO of BlackRock, an investment firm with over $4.6 trillion under management. This year, the letter encouraged company leadership to invest in long-term value creation, to disclose more clearly their strategies for long-term growth and to expressly affirm to shareholders that the board has reviewed the strategic plan.
Suggested Enhancements for Annual Audit Committee Disclosure
PwC recently offered guidance to public companies on how to enhance their audit committee-related disclosure this proxy season. Overall, PwC urges companies to go beyond boilerplate disclosure and voluntarily provide more relevant and useful information on how their audit committees perform their oversight duties and responsibilities.
Three Percent Ownership Becoming Consensus for Proxy Access Provisions
Proxy access remains a hot issue in 2016, with the New York City Comptroller announcing that it has targeted 72 public companies with proposals, following a successful 2015 campaign. Institutional investor Vanguard also recently announced its general guidelines for voting on proxy access proposals. While Vanguard says that it will continue to take a case-by-case approach, it indicates a preference for proxy access by a shareholder or group holding three percent of the stock for three years, rather than an ownership threshold of five percent as announced early last year.
The Ticker shares recent developments in SEC compliance, capital markets, corporate governance, executive compensation and other matters important to public companies and their officers and directors. It is published by Fredrikson & Byron’s Public Companies Group.