Proxy Access

Clients count on Latham & Watkins’ experience advising on complex corporate governance issues, including shareholder proxy access.

Proxy Access History

Latham has been involved with proxy access since the SEC first proposed the regime in 2003.

In 2009, when proxy access appeared poised to become a critical corporate governance issue with significant implications for the 2010 proxy season, Latham formed a task force to help clients understand and follow the proxy access debate.

The issue subsided in 2011 when a federal appeals court invalidated the proxy access rules the SEC had proposed the previous year, although the SEC retained its position that shareholder proposals for proxy access may be included in the company’s proxy statement under Rule 14a-8.

In November 2014, the Office of the New York City Comptroller reignited the proxy access issue with its “Boardroom Accountability Project” under which it sent proxy access proposals to 75 leading US public companies during the 2015 proxy season. Many large institutional investors support proxy access, have adopted and announced recommended proxy access provisions, and are encouraging companies to adopt them voluntarily.

Proxy Access and Your Company

Latham lawyers assist public company clients to strategically assess all aspects and phases of the proxy access process, including:

  • Whether a company is likely to be the target of a proxy access campaign
  • How proxy access should be viewed in light of the company’s overall corporate governance posture and history, as well as its shareholder base
  • Whether to adopt a proxy access regime proactively
  • How to respond to a shareholder proxy access proposal, including whether and how to oppose such a proposal or to compromise and negotiate with the proposal’s shareholder proponents
  • How to respond if and when shareholders approve a shareholder proposal regarding proxy access, taking into account whether the proposal is binding or precatory
  • How much flexibility a company has to deviate from the terms of a shareholder-approved proxy access proposal in adopting a proxy access provision