Proxy proposals probed
This spring’s proxy season, as some shareholders have gotten proposals on the agenda for their companies’ annual meetings, has seen an increased focus on climate change and social issues.
Federal regulators, meanwhile, are looking at the proxy system and considering stricter rules for shareholders seeking to put forward resolutions. Among the questions being mulled by the Securities and Exchange Commission: whether changes are needed in the required levels for proposals to qualify for the corporate ballot.
Republican lawmakers have proposed, for example, requiring that shareholders would have to own at least 1% of a company’s stock for at least three years. The current requirement is $2,000 of stock for one year.
Shareholder advocates say such restrictions would hurt the ability of small investors and many investment funds to change corporate conduct.
But SEC Commissioner Elad Roisman has suggested the required dollar amount of stock ownership may no longer be valid due to inflation and marketplace changes.
He says a balance is needed between activists seeking to increase shareholder value and those exploiting the process “to further their personal agenda.”