This year was a break-through year for shareholder proposals seeking to implement proxy access, a mechanism allowing shareholders to nominate directors and have those nominees listed in the company’s proxy statement and on the company’s proxy card. It is estimated that over 100 proxy access proposals were submitted to public companies during the 2015 proxy season, 75 of which were submitted by New York City Comptroller Scott Stringer on behalf of the New York City pension funds he oversees. Stringer’s “2015 Boardroom Accountability Project” affected companies in diverse industries and with a range of market capitalizations, but explicitly targeted companies with purportedly weak track records on board diversity, climate change or say-on-pay. The Comptroller’s proposals, which were precatory and identical regardless of the company’s market capitalization, generally called for the right of shareholders owning three percent of the company’s outstanding shares for at least three years to nominate up to 25% of the board in the company’s proxy materials.
As of July 26, 2015, 81 proxy access shareholder proposals have been submitted to a vote at Russell 3000 companies, compared to 17 proposals in 2014 and 13 proposals in 2013. Of the 81 proposals that have been voted on thus far this year, 48 proposals (or 59.3%) passed, and 33 proposals (or 40.7%) failed. So far this year, shareholder proposals submitted to a vote at Russell 3000 companies received average shareholder support of 54.7%. While this appears to depart from the average support of 30.9% garnered by proxy access shareholder proposals in 2014, it is in line with the 53.4% average support received last year for proposals with 3% / three-year thresholds.