Proxy recommendation guidelines for 2015 also heighten scrutiny of pre-IPO charter changes
Glass Lewis, the world’s second-biggest proxy advisory firm, will toughen its stance against companies that seek to make it harder for shareholders to call special meetings, try to adopt a classified board structure or take other measures that could curb shareholder rights in the 2015 proxy season, the firm says.
Glass Lewis says it will recommend a vote against the chair of a company’s governance committee ‒ or the entire committee ‒ if the board amends its bylaws to impose the ‘elimination of the ability of shareholders to call a special meeting or to act by written consent’ or ‘an increase to the ownership threshold required for shareholders to call a special meeting’.
The series of amendments to Glass Lewis proxy voting guidelines for the US include a recommendation against the governance committee if the board approves bylaw amendments that require shareholders to pay the company’s legal expenses if they don’t win a court case against the company or require arbitration of shareholder claims.
The new recommendation guidelines also heighten scrutiny of changes a company makes to its charter or bylaws before launching an IPO. ‘We will consider recommending to vote against all members of the board who served at the time of the adoption of an anti-takeover provision, such as a poison pill or classified board, if the provision is not put up for shareholder vote following the IPO,’ Glass Lewis says in its guidelines statement.
The guideline updates come after ISS, the largest proxy advisory firm in the world, amended its policies for the 2015 season. From next year, ISS will adopt a ‘scorecard’ approach to evaluating equity plans in the US, basing its recommendations on the cost of the plan, its features and grant practices.
It will also recommend not voting in favor of an independent director who attends less than 75 percent of board meetings in Japan and will defend one-shareholder, one-vote policies in France.
