The 2016 proxy season is in full swing, and similarly to 2015, the number of shareholder proposals has increased. According to a report by The Manhattan Institute’s Proxy Monitor, for Fortune 250 companies with annual meetings scheduled on or before April 30, there was a 7.5 percent increase in shareholder proposals compared to last year. Many of these proposals involve environmental, political and social issues, among others.
Proxy access continues to be one of the most popular areas of shareholder proposals. The Boardroom Accountability Project, which was launched in November 2014 by New York City Comptroller Scott Stringer and the New York City pension funds, submitted 72 proxy access proposals for 2016, down slightly from the 75 proxy access proposals they submitted in 2015. In 2015, two-thirds of proxy access proposals were successful. So far this year, four out of ten proxy access proposals that have been voted on have been successful. This is down compared to last year; however, these numbers could change in the remaining weeks of proxy season. In the six instances so far this year where proxy access proposals were unsuccessful, the companies had adopted their own proxy access bylaws which differed from the shareholder proposals.
Companies should be mindful of the continued focus on proxy access proposals, and those who have not yet adopted proxy access bylaws should consider whether to do so preemptively, given the current climate. As more companies hold their annual meetings in the coming weeks, it will be interesting to see the results of this year’s shareholder proposals and how they may influence next year’s proxy season and corporate governance trends.