ON Securities

Early November finds us in a kind of limbo – those of us who advise public companies on governance and compensation matters are waiting for something big to happen. But there’s plenty of smaller stuff to report on – although most of these items present more questions than answers . . . . On November 4, SEC Chairman gave a speech addressing current regulatory developments. She described the proxy disclosure rules but did not address when they would be adopted or considered. . . . Rep. Maxine Waters has proposed an amendment to the Investor Protection Act of 2009 . . . . [to read more, click on the link above]

Just as lawmakers and regulators are preparing to consider compensation reform once again, a new report has surfaced that’s likely to turn up the heat on the debate. The Wall Street Journal reported that the major financial institutions are on pace to pay their employees around $140 billion this year – a record level. . . . For example, the Journal projects that Goldman Sachs will pay $20 billion in compensation and benefits ($743,000 per employee) this year. . . . At long last, this month there has been a new development worthy of changing the Cheat Sheet. As reported in Bloomberg and elsewhere, the SEC has decided not to take any action on the proposed shareholder access rules this year . . . . [to read more, click on the link above]

I just went through some of the hundreds of comment letters on the SEC’s controversial proposal to adopt Rule 14a-11 on proxy access. . . . Several comment letters, including the letter from the U.S. Chamber of Commerce, describe explicit theories about why the proposed rule should be struck down by the courts if adopted. .. .It seems apparent that, if the SEC adopts Rule 14a-11, the enforcement of the rule will be tied up in court, and the rule could eventually be struck down. . . . Either way, the amendment to 14a-8 is likely to be effective long before Rule 14a-11. . . . [To read more, click on the title above]

There have been several recent articles on the SEC’s proposed proxy access rule, Rule 14a-11. . . . A Wall Street Journal article last week (subscription required for full article) reported that “. . . the measure looks like it will be passed by the Securities and Exchange Commission in November.” . . . . However, this post by Dave Lynn in the Corporate Counsel blog last Friday puts the proposal’s status in perspective and raises doubts that shareholder access is a “done deal”. . . . [to read more, click on title above]

TheCorporateCounsel.net Blog reports that the ABA’s Task Force on Shareholder Proposals has released an exposure draft of a model bylaw for Delaware corporations to grant shareholder access – giving significant shareholders the ability to nominate one or more director candidates and have the candidates included in management’s proxy statement. . . . The SEC’s proposed rules on shareholder access, if adopted, will make shareholder access mandatory and will eliminate much of the flexibility incorporated into the model bylaw. . . . Assuming the SEC’s rules become effective, public companies will move to adopt bylaws to clarify the procedures and standards for shareholder access, and the Task Force’s draft will be a useful starting point.

. . . Until I read his Wikipedia profile, I didn’t realize that Michael Jackson was the named inventor on an issued patent. . . .

(read more) – Marty Rosenbaum