On Friday, November 18, 2016, the Staff in the Office of Mergers & Acquisitions (“OM&A”) in the Division of Corporation Finance (the “Staff”) at the Securities and Exchange Commission released several new Compliance and Disclosure Interpretations (“C&DIs”) addressing:
First-Come, First-Served: Enrollment Opens for Glass Lewis 2017 Issuer Data Report Program
On November 17, Glass Lewis announced that it has opened enrollment for its 2017 Issuer Data Report (IDR) program. The IDR program enables public companies to access (for free!) a data-only version of the Glass Lewis Proxy Paper report prior to Glass Lewis completing its analysis and recommendations relating to public company annual shareholders meetings. Glass Lewis does not provide drafts of its voting recommendations report to issuers it reviews, so the IDR is the only way for issuers to confirm the accuracy of the data before Glass Lewis’ voting recommendations are distributed to its clients. Moreover, unlike Institutional Shareholder Services (ISS), Glass Lewis does not provide each issuer with complimentary access to the final voting recommendations for its annual shareholders meeting. IDRs feature key data points used in Glass Lewis’ corporate governance analysis, such as information on directors, auditors and their fees, summary compensation data and equity plans, among others. The IDR is not a preview of the final Glass Lewis analysis as no voting recommendations are included. Each participating public company receives its IDR approximately three weeks prior to its annual shareholders meeting and generally has 48 hours to review the IDR for accuracy and provide corrections, including supporting public documents, to Glass Lewis. Participation is limited to a specified number of companies, and enrollment is on a first-come, first-served basis. Enrollment closes on January 6, 2017, or as soon as the annual limit is reached. To learn more about the IDR program and sign up to receive a copy of the 2017 IDR for your company, go to https://www.meetyl.com/issuer_data_report.
Shareholder Nominates First Proxy Access Nominee
In what appears to be the first use of a company’s proxy access bylaw, GAMCO Asset Management filed today a Schedule 13D/A (available here ) and a Schedule 14N (available here ) announcing that it has used the proxy access bylaw at National Fuel Gas (NFG) to nominate a director candidate for election at NFG’s 2017 Annual Meeting. According to the 13D/A, GAMCO and its affiliates beneficially own in the aggregate approximately 7.81% of NFG’s Common Stock and yesterday delivered a letter to NFG nominating Lance A. Bakrow to the Board of Directors. NFG described itself in its most recent Form 10-K as “a diversified energy company engaged principally in the production, gathering, transportation, distribution and marketing of natural gas.” According to the Schedule 13D/A, Mr. Bakrow is the “co-founder and a director of Greenwich Energy Solutions, a private company that provides independent energy solutions in the northeastern United States.” NFG’s Proxy Access Bylaw
New SEC Staff C&DI Permits Website Posting of Annual Reports in Lieu of Filing Hard Copies with SEC
A new Compliance and Disclosure Interpretation (C&DI) affords companies relief from the requirement to file seven hard copies of the annual report to shareholders with the Securities and Exchange Commission (SEC). Under the C&DI, which was issued yesterday, companies may now satisfy this requirement by posting the annual report on their corporate websites, as long as it remains available on the site for one year. The C&DI is available here and excerpted below.
ISS Data Verification Period Open Until November 11 for New ISS QualityScore
ISS Data Verification Period Open Until November 11 for New ISS QualityScore
Today proxy advisory firm Institutional Shareholder Services Inc. (“ISS”) opened the data verification period for its corporate governance rating system, which was formerly known as QuickScore. ISS also announced that it has revised and rebranded the rating system, which will now be referred to as QualityScore. QualityScore is the successor to ISS’s QuickScore, which in turn succeeded ISS’s Governance Risk Indicators (“GRId”) and Corporate Governance Quotient (“CGQ”) benchmarking tools.
SEC Corp Fin Staff Releases Guidance on CEO Pay Ratio Disclosure
| On October 18, the Division of Corporation Finance (the “Staff”) of the Securities and Exchange Commission (the “Commission”) released five Compliance and Disclosure Interpretations (“C&DIs”) addressing new Item 402(u) of Regulation S-K regarding CEO pay ratio disclosure. |
SEC Eliminates Need for Affirmative “Tandy” Representations from Issuers
On October 5, 2016, the Staff in the Division of Corporation Finance (the “Staff”) of the Securities and Exchange Commission (the “SEC”) announced that it will no longer require companies to make so-called Tandy representations in their filing review correspondence.
Recent SEC Comment Letters Addressing Non-GAAP Financial Disclosures
Since the Division of Corporation Finance (the “Staff”) of the Securities and Exchange Commission (the “Commission”) released updated guidance addressing the use of non-GAAP financial measures on May 17, 2016, the Staff has made public over 200 comment letters sent to companies relating to non-GAAP disclosures. The below chart summarizes the major topics addressed in those comment letters and the frequency with which each topic appears.
ISS Releases Survey for 2017 Policy Updates
Institutional Shareholder Services (“ISS”) today launched its annual global policy survey. Each year, ISS solicits comments in connection with the review of its proxy voting policies. At the end of this process, in November 2016, ISS will announce its updated proxy voting policies applicable to 2017 shareholders’ meetings. ISS will publish the results from the policy survey and use them to inform its voting policy review. The survey includes questions on several governance and compensation matters relevant to U.S. companies, as follows:
Schedule 13G “Passive” Investor Status – When Being A Little Active Is Still Passive!
On Thursday, July 14, 2016, the Staff in the Division of Corporation Finance posted a new C&DI on Section 13(d) that provides stockholders (and issuers) with some helpful insights, and perhaps greater clarity, on when significant stockholders can engage in a dialogue with management and still remain on Schedule 13G. As many practitioners know, Schedule 13G (the “short form” for reporting beneficial ownership of equity positions of 5% or more) often requires an affirmative certification from the reporting person(s) that the securities were not acquired, and are not held, with the purpose or effect of changing or influencing control of the issuer. This is commonly referred to as the “passive” investor certification which is set forth at the end of Schedule 13G, directly above the signature line.