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CALIFORNIA CORPORATE & SECURITIES LAW

Who Votes As Proxy For Shares Standing In The Name Of Another Corporation?

The Proxy Season blog yesterday discussed the following question from the Q&A Forum of TheCorporateCounsel.net: Under Delaware law, can a Board of Directors authorize a person who is not an officer of the company to act as agent and vote shares of stock for the Company that it holds in another entity? John Jenkins responded…

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Does Mandated Unbundling Deprive Stockholders The Right To Vote On The Whole?

A forthcoming academic paper looks for bundling in more than 1,500 management proposals between 2003 and 2012.  Bundling occurs when multiple matters are combined into a single proposal.  The authors, James Cox, Fabrizio Ferri, Colleen Honigsberg, and Randall Thomas, conclude that bundling occurs far more frequently than had been suggested by prior studies.  They recommend that the Securities…

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What’s The Matter With The SEC’s Unbundling Interpretation?

Rule 14a-4 requires, among other things, that a form of proxy “identify clearly and impartially each separate matter intended to be acted upon, whether or not related to or conditioned on the approval of other matters, and whether proposed by the registrant or by security holders.”  This language was part of the SEC’s 1992 proxy…

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Should A Proxy Card Specify A Choice Of Law?

One of the jobs of an inspector of election is to determine the validity and effect of proxies.  See, e.g., Cal. Corp. Code § 707(b) and 8 Del. Code § 231(b)(2).  However, the validity and effect of proxies will depend upon state law.  I’m guessing that many people assume that the law of the state of…

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A Cumulous Cloud Of Confusion Reigns Over Vote Required For Say-On-Pay Frequency

In reviewing recent proxy statement filings with the Securites and Exchange Commission, I’ve noted a great deal of confusion regarding the vote required for approval of the newly mandated advisory resolution on the frequency of shareholder votes on executive compensation.  Section 951 of the Dodd-Frank Act requires issuers to include in their proxy statements a resolution to determine…

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A Proxy Is Not A Vote And Why It Matters

As discussed in this prior post, the Securities and Exchange Commission recently proposed rule amendments to implement the Dodd-Frank Act’s executive compensation advisory votes mandates.  Regrettably, the SEC’s proposal perpetuates the common misconception that executing a proxy is the same as voting.  For example, the SEC’s proposed Rule 14a-4(b)(3) refers to “[a] form of proxy which provides for a shareholder vote…

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Proxy Access and Director Qualification Requirements

Last week, the Securities and Exchange Commission adopted its final changes to the federal proxy rules.  These new rules will require public companies, under specified circumstances, to include in their proxy materials information about, and the ability to vote for, a shareholder’s (or shareholder group’s) nominee(s) for director.  In adopting these rule changes, the SEC expressly…

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