On November 17, 2021, the Securities and Exchange Commission adopted final rules requiring public companies and shareholder proponents in contested elections to use universal proxy cards that include all director nominees for election, as well as requiring enhanced disclosure of voting options in all elections. The final rules will be effective 60 days after the date of publication in the Federal Register. Compliance with the rules related to universal proxy cards will be required for any director election held after Aug. 31, 2022, regardless of whether the election is contested. Companies should understand and make plans to comply with the rule changes prior to the implementation date.

Under current rules, shareholders voting by proxy are unable to vote for a combination of director nominees from competing slates, as they could if they voted in person at a shareholder meeting. The new rule requires that proxy cards list all duly-nominated director candidates, regardless of whether they were nominated by the board or a shareholder, allowing shareholders to vote through the proxy process in the same manner as they could by voting in person.

The rules apply to all non-exempt solicitations for contested elections other than those involving registered investment companies and business development companies.

The new rules require management and dissident shareholders to provide each other with notice of the names of their nominees, establish a filing deadline and a minimum solicitation requirement for dissidents, and prescribe presentation and formatting requirements for universal proxy cards. The Commission also adopted amendments to the proxy rules to require proxy cards to clearly specify the applicable shareholder voting options in all director elections and to require proxy statements to disclose the effect of a shareholder’s election to withhold its vote, including by mandating that “against” and “abstain” options be provided on a proxy card where such options have legal effect under state law.  We plan to cover these changes in detail in our upcoming Securities and Capital Markets Newsletter.

The SEC’s public statement announcing the approval of the new rule is available here.


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