Could new requirements from the Securities and Exchange Commission (SEC) soon change the way your business conducts shareholder meetings?
The SEC has proposed several new measures to grant even more voting power to shareholders of US companies, according to The Wall Street Journal’s Market Watch.
Here’s how suggested measures could affect shareholder voting for US corporations moving forward:
Before: In general, shareholders have had a difficult time influencing the way companies operate, especially when it comes to executive pay.
After: A new SEC proposal would give shareholders a non-binding vote on executive pay.
Before: Shareholders have long had the right to nominate director candidates, but the process was extremely expensive because they had to use their own proxy documents.
After: A new SEC proposal would allow shareholders to nominate director candidates using the company’s proxy documents, thus streamlining the process and making it more cost-effective.
Before: Previously when shareholders sought to remove a director from a board without nominating their own candidates, they would cast protest votes during shareholder meetings, hoping the director would resign on his or her own.
After: A proposed measure from the SEC would prohibit brokers from casting director-election votes on behalf of investors who don’t vote. With the new measure in place, brokers can’t dilute shareholders’ message by voting on behalf of non-voting investors.
Before: Previously, executives could be re-elected in uncontested elections with just vote.
After: A new measure would require directors to win more than 50% of investor votes to be re-elected to boards. Executives not receiving a 50% vote would have to submit their resignation.
Granting additional voting rights during shareholder meetings will necessitate an even more accurate, streamlined voting process.
By leveraging electronic voting systems, companies can ensure:
- Rapid, accurate voting results
- Detailed audit trail of attendance and voting
- Quick, automated registration for shareholders
- Instant identification of shareholders with voting rights
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