Sandra Flow

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For more than a decade, the SEC has been wrestling with whether and how to regulate the activities of the proxy advisory firms – principally ISS and Glass Lewis – that have come to play such an important role in shareholder voting at U.S. public companies.  On July 22, 2020, the SEC adopted rules and…

This is an updated version of our prior post to address Governor Cuomo’s most recent Executive Orders.

In response to the COVID-19 pandemic, Governor Cuomo declared a disaster emergency and ceased operation of all non-essential businesses in New York state with the March 7 Executive Order 202 and its successor Executive Orders.  In particular, the March 20th Executive Order 202.8 provided temporary suspension of several state law regulatory requirements, including with respect to shareholder meetings of New York corporations.
Continue Reading UPDATE: Cuomo Executive Order Gives New York Corporations Relief on Physical Annual Meetings

On April 8, Institutional Shareholder Services (“ISS”) published additional guidance on application of its benchmark voting policies amid the COVID-19 pandemic.[1] ISS had previously issued its 2020 benchmark policies update to be applied for shareholder meetings on or after February 1, 2020.[2] Noting the societal and economic uncertainty wrought by COVID-19 since its prior update, ISS provides further guidance focused on four key areas:

  • Annual General Meeting (“AGM”) Issues;
  • Poison Pills, Shareholder Rights and Boards/Directors;
  • Compensation Issues; and
  • Capital Structure and Payouts.

Continue Reading ISS Issues Additional Voting Policy Guidance in Response to COVID-19 Pandemic

On April 2, 2020, Glass Lewis announced the global expansion of its Report Feedback Statement (“RFS”) service.[1] This service operates separately from the process for companies reporting factual errors or omissions in a research report and instead focuses on differences of opinion, allowing companies and shareholder proposal proponents to respond directly to Glass Lewis’s research and recommendations.[2]
Continue Reading Glass Lewis Expands Report Feedback Statement Service

On March 25, 2020, due to the continuing impact of COVID-19, the SEC issued an order extending its previously-issued conditional relief from certain Exchange Act reporting requirements and proxy delivery requirements.

In particular, the March 25 order provides U.S. public companies with a 45-day extension to file or furnish certain filings otherwise due between March

…

Glass Lewis recently announced an update of its guidelines, which temporarily relaxes its standard policy against virtual meetings in light of COVID-19. The update provides that “[f]or companies opting to hold a virtual-only shareholder meeting during the 2020 proxy season (March 1, 2020 through June 30, 2020), [Glass Lewis] will generally refrain from recommending to vote against members of the governance committee on this basis, provided that the company discloses, at a minimum, its rationale for doing so, including citing COVID-19.”[1]  This formal update of Glass-Lewis’s guidelines comes on the heels of statements by both Glass-Lewis and ISS indicating openness to relax their positions on virtual meetings, which we discussed here.
Continue Reading Glass Lewis Revised Guideline Regarding Virtual Meetings for 2020 Proxy Season

This is an updated version of our prior post to address a new guideline issued by Glass Lewis.

With rising concerns around the spread of COVID-19 (“coronavirus”) in the United States and globally, in order to mitigate health risks, many public companies may consider adding a virtual component to the format of their annual shareholder meetings.  In the United States, state law generally governs the availability of a virtual meeting format.  At the federal level, the SEC regulates the filing and mailing of proxy solicitation materials.  While we have not seen direct guidance from state legislatures on virtual or hybrid meetings in the context of the coronavirus pandemic, on March 13, 2020, the SEC released guidance (“SEC Coronavirus Guidance”) addressing annual shareholder meetings[1] in light of recommendations by the Centers for Disease Control and Prevention (“CDC”) and other public health officials to cancel, or explicitly state policies that prohibit, large, in-person gatherings[2] in an effort to prevent the spread of coronavirus.[3]  Set forth below are various considerations that a company should take into account when determining whether to move from an in-person to a virtual or hybrid[4] annual meeting
Continue Reading UPDATE: Coronavirus & Virtual Annual Meetings

In light of the growing concern about COVID-19 (“coronavirus”) in the United States and globally, the U.S. Centers for Disease Control and Prevention (“CDC”) and other public health officials have recommended cancelling large, in-person gatherings for the next several weeks.[1] As a result, some companies may be considering, or may in the coming weeks need to consider, postponing the date of their shareholder meeting.  While moving to a virtual or hybrid meeting, as discussed in our blog post, “Coronavirus & Virtual Annual Meetings,” may be a good solution for certain companies, other companies may determine (or due to a lack of vendor capacity may be forced to determine) that the better course of action for them is to postpone or adjourn their annual meetings.
Continue Reading Coronavirus & Postponing/Adjourning Annual Meetings

Last week the Securities and Exchange Commission Chair Clayton and Commissioners Lee and Peirce each issued statements on climate-related disclosures in SEC filings. The statements were prompted by the concurrent SEC’s proposal to amend the MD&A rules and evidence some debate within the SEC on this topic, which has attracted considerable recent attention among investors,…

Yesterday the Securities and Exchange Commission took two significant actions relating to the MD&A disclosures in annual and quarterly reports of public companies.

First, it proposed amendments to MD&A requirements that would, if adopted, make significant and long-overdue improvements to a central disclosure requirement of the U.S. securities laws. Second, it issued guidance on the…