In a previous alert published in July, The UK’s Blueprint for Financial Regulation, we looked at the UK Government’s proposals for an overhaul of the UK financial regulatory infrastructure. These proposals were issued upon the initiation of the new Government, aimed at addressing a systemic failure in the UK domestic regime to recognise and respond in a timely and adequate manner to the global financial crisis.
Topic: Corporate Governance
SEC Proposes Rules for Say-on-Pay and Say-on-Golden-Parachute Votes
On October 18, 2010, the Securities and Exchange Commission ("SEC") proposed rules, available here, to implement the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") relating to: (1) shareholder advisory votes on executive compensation ("say-on-pay"); (2) shareholder advisory votes on the frequency of say-on-pay votes ("say-on-frequency"); and (3) shareholder advisory votes on compensation arrangements in connection with significant corporate transactions ("say-on-golden-parachutes"). The proposal includes transition provisions that companies may rely on until final rules are adopted. The SEC also proposed rules, available here, relating to disclosure by institutional investment managers of their proxy voting on executive compensation and other matters. Both rule proposals were issued pursuant to Section 951 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which we described in detail in our July 21, 2010 client memorandum, available here. Comments on the proposed rules should be submitted on or before November 18, 2010.
Delaware Court of Chancery Issues Important Opinion for Corporations with Staggered Boards
On October 8, 2010, the Court of Chancery of Delaware issued an important opinion, Airgas, Inc. v. Air Products & Chemicals, Inc. (Del. Ch. Oct. 8, 2010), with significant implications for public corporations with staggered boards. The decision arose out of the ongoing takeover battle by Air Products for control of Airgas, Inc. At Airgas’s 2010 annual meeting, held last September 15, Air Products successfully obtained all three board seats that were up for election on Airgas’s nine-member staggered board. In addition, holders of 45.8% of the shares entitled to vote at the annual meeting approved a bylaw amendment, proposed by Air Products, which would cause Airgas’s annual meeting to be held each year in the month of January as opposed to August, when Airgas’s annual meetings had historically been held. Adoption of the proposed bylaw means that Airgas’s 2011 annual meeting will take place barely four months after Airgas’s 2010 annual meeting was held, and Air Products will have the opportunity to replace a majority of Airgas’s staggered board in the space of four months. Airgas filed suit and moved to declare the bylaw amendment invalid.
Dodd-Frank’s “Say-on-Pay” Provisions
Orange County of counsel David C. Lee and associate Brian D. O’Neill are the authors of "Dodd-Frank’s ‘Say-on-Pay’ Provisions" [PDF] published in the October 2010 issue of Insights.
Proxy Access Litigation and Next Steps
The following provides an update on the litigation challenging the “proxy access” rules adopted by the Securities and Exchange Commission (“SEC” or “Commission”), and also discusses steps companies should consider during the pendency of the litigation. Our client alert dated August 25, 2010, available here, provided an overview of the proxy access rules.
Delaware Court of Chancery Issues Important Poison Pill Opinion
New York partner Eduardo Gallardo and associate Sharon I. Grysman are the authors of "Delaware Court of Chancery Issues Important Poison Pill Opinion" [PDF] published in the October 2010 issue of Insights.
Executive Compensation, Corporate Governance and Other Securities Disclosure Provisions in the Dodd-Frank U.S. Financial Regulatory Act
Washington, D.C. partners Amy Goodman, Ronald Mueller and Elizabeth Ising are the authors of "Executive Compensation, Corporate Governance and Other Securities Disclosure Provisions in the Dodd-Frank U.S. Financial Regulatory Reform Act" [PDF] published in BNA’s Securites Regulation & Law on September 20, 2010.
Webcast – Implementing the Dodd-Frank Wall Street Reform and Consumer Protection Act
On July 21, 2010, President Barack Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act, the most sweeping financial reform legislation in over a generation. Gibson Dunn panelists discuss the regulatory initiatives in the bill that are likely to be of interest and concern to the wide range of companies affected by the bill.
U.S. SEC Adopts Final Rules on Proxy Access
Today the U.S. Securities and Exchange Commission ("SEC") adopted amendments to its proxy rules to permit shareholders to include their director candidates in a company’s proxy materials–commonly referred to as "proxy access." The vote on the amendments was 3-2, with Commissioners Casey and Paredes dissenting due to numerous concerns, including that the proxy access rules encroach on state corporate law and interfere with private ordering by companies and their shareholders.
Delaware Court of Chancery Issues Important Poison Pill Opinion
On August 11, 2010, the Delaware Court of Chancery issued an important opinion in the area of stockholder rights plans, or poison pills. Vice Chancellor Strine’s opinion in Yucaipa American Alliance Fund II, L.P. v. Riggio et al., 2010 WL 3170806 (Del. Ch. Aug. 11, 2010), reaffirms Delaware’s traditional deference to a board’s well-informed and well-reasoned implementation of antitakeover measures, and gives meaningful guidance to boards and their advisors in the implementation of poison pills and other defensive measures in the face of a potential unsolicited change in control situation.