The SEC’s proposed rule on proxy access is garnering plenty of comments, both in favor of and against, with more than 300 comments filed on the proposal as of Aug. 18, 2009 writes ProxyGovernance’s Scott Fenn.
Law professors and law firms are represented prominently among the institutions and individuals commenting. One omnibus comment letter on behalf of a bi-partisan group of eighty professors of law, business, economics and finance affiliated with 47 separate universities supports the final adoption of proxy access based on the current SEC proposal without “modifications that could dilute the value of the rule to public investors.” Another comment letter from ten faculty members at the Harvard business and law schools, while generally supportive of the broad intent of the SEC’s proposal, argued that the threshold of share holdings for proxy access should be set higher – at 5 to 10% – and that all companies should have the ability to “opt out” of the new proxy access rules subject to a majority vote by shareholders. Still another comment letter from seven of the most prominent securities practice law firms – Cravath, Swaine & Moore; Davis Polk & Wardwell; Skadden, Arps, Slate, Meagher & Flom; Sullivan & Cromwell; Simpson Thacher & Bartlett; Latham & Watkins; and Wachtell, Lipton, Rosen & Katz – argues in favor of amending rule 14a-8 to allow proxy access but against the adoption of proposed rule 14a-11, or any prescriptive proxy access rule, “until there has been sufficient experience with private ordering of proxy access under amended rule 14a-8(i)(8) to permit the SEC to make a more informed decision as to whether a prescriptive rule governing proxy access is necessary and desirable.”
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Last Updated: 21 August 2009