What are Universal Proxy Cards?
The SEC’s new universal proxy rules require the use of proxy cards listing the names of all director candidates in a contested election, regardless of whether the candidates were nominated by the board or shareholders. This is a significant change to the previous rules which saw different proxy cards used by the company and by dissidents, with each card only listing their respective slate of nominees.
Now, shareholders will be able to more easily pick and choose individual directors across all nominated directors.
Universal Proxy Cards: What you Need to Know with Okapi’s Bruce Goldfarb
When did the SEC’s Universal Proxy Card rules take affect?
The SEC’s universal proxy card rules took effect on on September 1, 2022.
Do Activists nominating directors have to solicit shareholders?
Yes, activists that are nominating directors to a board need to solicit a minimum of 67% of shares entitled to vote in the election.
Are there minimum ownership thresholds with Universal Proxy Card changes?
The SEC’s new universal proxy rules do not impose minimum ownership thresholds or holding periods nor do they cap the number of nominees.
How can shareholders assess individual public company directors?
The Boardroom Alpha platform enables users to evaluate all US public company CEOs, CFOs, and directors. Learn more about the Governance Analytics Platform here.
Additional References on Universal Proxy Cards
- Via Sidley: Bylaw Amendments, Shareholder Activism, and Flying Close to the Sun
- Via SEC: Fact Sheet: Universal Proxy Rules for Director Elections
- Via Sidley: ISS Provides Guidance on the Universal Proxy Card, Puts “Weakest” Directors on Notice
- Via Davis Polk: Practical takeaways of universal proxy card voting in contested director elections
- via Glass Lewis: The Implementation, and Implications, of Universal Proxy Cards
- Via The Activist Investor: Bitter Bar Bylaws Battle Brewing
- via Harvard Law School Forum on Corporate Governance: Preparing for the 2023 Proxy Season in the Era of Universal Proxy
- via Forbes: Activist Battles Are About To Get A Lot More Personal