Following the completion of one of the most divisive presidential elections in U.S. history, the election of President Trump and the retention of Republican majorities in both the U.S. Senate and House will impact the public disclosures of many U.S. public companies. The expectation of the securities markets that the results of these elections will significantly impact the prospects of many companies was reflected in the sharp movements in the stock prices in various sectors which occurred shortly after the 2016 elections. While the overall stock market trend since the 2016 elections has been positive, companies in certain sectors such as manufacturing and financial institutions have achieved gains significantly in excess of market norms, with companies in other sectors, such as utility and certain healthcare sectors, having underperformed in relation to market norms (although some healthcare companies have recovered from stock market declines seen in the immediate aftermath of the elections).
Continue Reading The Trump Effect: The Impact of the 2016 Elections on Public Company Securities Disclosures
ISS and Glass Lewis: Proxy Season Preparation
ISS and Glass Lewis recently updated their proxy voting guidelines in advance of the 2017 proxy season. The updates to the ISS guidelines will be effective for meetings beginning in February 1, 2017, and the updates to the Glass Lewis guidelines will be effective for meetings beginning in January 1, 2017.
Unlike in certain past years, the revisions to the proxy voting guidelines of ISS and Glass Lewis will not significantly impact the public company corporate governance landscape or impact most public companies. The changes made to the ISS guidelines include:
- tightening the overboarding policy of ISS (by lowering the number of public company board positions it considers acceptable for non-CEO directors from six to five),
- certain technical revisions to ISS guidelines with respect to proposals to amend or approve equity-based compensation plans, and
- updating the policies of ISS with respect to proposals to address non-employee director compensation.
Continue Reading ISS and Glass Lewis: Proxy Season Preparation
SEC Comment Letter Trends
Deloitte recently posted an excellent study regarding SEC comment letter trends.
The Deloitte study highlights the significant increase in 2016 in SEC comments regarding non-GAAP financial measures, which is no surprise in light of the SEC’s public comments regarding this issue and the new SEC guidance (C&DIs) released in May 2016, and is consistent with trends we have been seeing. Registrants should continue to be mindful of the focus of the SEC (both the Division of Corporation Finance in relation to the SEC comment letter process and the Division of Enforcement) on this issue.Continue Reading SEC Comment Letter Trends
Should Public Companies Voluntarily Adopt Proxy Access?
I authored an article published by Law360 on the growing trend in support for proxy access among shareholders. In the article, I weigh the pros and cons of adopting proxy access for a public company and concludes “on balance, we believe that many public companies that have not yet adopted proxy access or received a