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Proxy Access Opportunities Start Now
Finally, the wait is over. Shareholders can begin to propose proxy access bylaw amendments (PABA? let's see if it catches on), with the expiration yesterday of the SEC's stay of the relevant regulations. (See below for our earlier correspondence on this subject.)
Smart investors should have a keen interest in this. It's actually relatively straightforward:
- It doesn't take significant time or effort to propose a PABA, although it does require a bit of careful research and strategy.
- Unlike a board proxy fight, it costs almost nothing to promote a proposed PABA to other shareholders.
Proxy access can pressure management in the right ways. While it doesn't assure that an unhappy investor can change a BoD or redirect an underperforming portfolio company, it does let a company know that investors have the will and the means to get serious about such a company.
Investors have choices in how to structure a PABA, and should think through the process of proposing and promoting it. And, corporations have some clever and insidious ways to oppose these efforts, so some advance planning makes great sense.
We've already started working on a couple of our own PABAs, and would be pleased to compare notes, or help others with their own PABA projects. See below for contact information.
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