Here’s a scorecard for those interested in how proxy access shareholder proposals fared in their first season (the ISS corporate governance blog has already reported some of this information, as has Francis Byrd of Laurel Hill Advisory Group, in his wonderfully titled “Byrd-Watch” page, but the numbers here are a little more comprehensive):
Download the Excel .xls version: 2012 proxy access votes
Grains of salt are in order: the sample is small (a total of nine access proposals were presented for a vote this year); in the case of KSW, moreover, the company had already adopted a proxy access bylaw (with a 5%/1 year ownership minimum). Still, and with two notable exceptions discussed below (Nabors and Chesapeake Energy), the voting was not a ringing shareholder endorsement of proxy access in any and all forms. Apart from those two exceptions, the 2012 votes in favor of proxy access have been below 40% of the shares voting, below 35% of shares present, and below 30% of shares outstanding.
The two exceptions, however, were at Nabors Industries and Chesapeake Energy, where the access proposal garnered approval of a majority of the shares voting and of the shares present at the meeting, and substantial minorities (39.6% and 44.5%) of the outstanding shares. What might explain these notable successes? One possibility is both Nabors and Chesapeake had been the subject of high-visibility questions about executive compensation and related party transactions involving their CEOs, including the controversy surrounding the $100 million severance payment (subsequently waived) to the former CEO. Another possibility is that the Nabors and Chesapeake access proposals were the most restrictive of this year’s crop, with a 3%/3 year ownership requirement mirroring the framework of the SEC rule (14a-11) struck down last year. It will be interesting, in any event, to see how the Nabors and Chesapeake boards of directors respond to the favorably shareholder votes.