Microsoft has agreed to keep its current thresholds for shareholder proposals through next year's annual meeting, even as the SEC moves to scale back its oversight of the process. The deal, struck with conservative activist Paul Chesser, comes after SEC Chair Paul Atkins proposed shifting proposal oversight away from the agency last week.
Microsoft will keep applying its existing eligibility thresholds for shareholder resolutions through its next annual meeting, according to an agreement seen by Reuters. The company struck the deal with Paul Chesser, director at the National Legal and Policy Center, who has pushed to preserve investor proposal rights as they come under pressure from a contentious SEC rule change.
An agreement built to offset SEC changes
The agreement only lasts a year, but it could effectively offset efforts by the regulatory agency to shift power away from investors toward corporate executives. Chesser said he hopes Microsoft's approach will become a corporate-governance model other companies follow.
According to Reuters: "the smallest long-term owners of the company will still have a way to be heard", Chesser said. He added that every other company claiming to value its shareholders should be asked why it won't do the same.
A Microsoft spokesperson confirmed the arrangement in an e-mailed statement, saying the company agreed to maintain current eligibility thresholds for one year to give shareholders a clear and predictable process for the next proxy cycle.
SEC oversight shift triggered the deal
Last week, SEC Chair Paul Atkins proposed ending the agency's oversight of the shareholder resolutions process and moving that function to state officials, a move activists see as diminishing their influence. The proposal is part of a broader shift of power away from investors toward managers by the Republican-dominated commission.
Chesser's group has similar resolutions pending with Procter & Gamble and Oracle and may submit more. P&G's annual meeting is set for October 13, and in its proxy statement dated August 28, the company recommended votes against the proposal, calling it premature since the SEC hadn't yet proposed its rulemaking. Oracle's annual meeting has not yet been set.
Microsoft's own annual meeting is scheduled for December 8 and traditionally falls early in the proxy cycle that runs through June 30 each year, drawing attention to the company's governance procedures.
Source: Investing.com
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