The U.S. Securities and Exchange Commission (SEC) voted Wednesday to propose amendments to its proxy rules that would require parties in a contested director election to use universal proxy cards that include the names of all director nominees.
The proposal would give shareholders the ability to vote for their preferred combination of board candidates by proxy, as they could by voting in person, the SEC says.
“The proposed changes would allow shareholders to vote by proxy in a manner that more closely replicates how they can vote in person at a shareholder meeting,” says Mary Jo White, SEC chairwoman in a news release. “This change would allow shareholders through the proxy process to more fully exercise their vote for the director nominees they prefer.”
The proposed rules, which are out for a 60-day comment period, would require proxy contestants to provide shareholders with cards that include the names of both management and dissident director nominees; and, they would prescribe presentation and formatting requirements for these cards. They would also require both management and dissidents to provide each other with notice of the names of their nominees, establish a filing deadline, and set a minimum solicitation requirement for dissidents.