As we enter 2017, we want to bring to your attention a few items that we believe will play a prominent role in the upcoming 2017 proxy season.
In 2016, as we had predicted, proxy access was the foremost hot topic, especially for Fortune 500 companies, and this continues to be the dominant theme in 2017. Indeed, it is quite likely that concern about proxy access, like majority voting before it, is likely to trickle down to Russell 3000 companies over the course of the next few years. And, although it is too soon to tell, it is also possible that the new Administration will make some changes to the corporate governance landscape that will impact public companies. For now, we are advising our clients to continue preparing for the 2017 proxy season and beyond as if the status quo will remain in effect, and we expect to publish timely alerts if there are any significant changes.
This handbook is broken into three parts. The first part deals with issues public companies should consider as they prepare for the 2017 proxy season. We start by discussing changes in the voting policies of ISS and Glass Lewis, along with the newly rebranded ISS governance rating system. We then review the current status quo of proxy access. Next, we examine a topic that we believe will generate a fair bit of discussion in the coming months – proxy presentation and readability. This topic is part of a greater discussion companies should be having about board involvement, refreshment and shareholder engagement. Finally, we discuss Staff Legal Bulleting No. 14H and say-when-on-pay.
The second part deals with a whole host of issues that the staff of the Securities and Exchange Commission has been focusing on, including non-GAAP measures, pay ratio disclosure, clawback rules, pay-for-performance disclosure, hedging disclosure, voluntary disclosures of audit committee matters, Form 10-K amendments, universal proxy card, and virtual-only annual meetings.
The third part deals with issues beyond proxy-related matters that are likely to impact public companies in general.
Please keep in mind that the Hot List is a summary only and is not intended to be specific legal or tax advice. We encourage you to call the authors of this alert or your DLA Piper contact if you have any questions or would like to discuss any of the issues described below in the context of your company.