Universal Proxies: SEC Proposal Moving Forward

In a move that may encourage shareholder activism and increase the potential for proxy contests, the Securities and Exchange Commission (SEC) has voted to propose amendments to the U.S. federal proxy rules (the Proposed Rules). As discussed in a previous post, the Proposed Rules will require parties in all "non-exempt" solicitations in a contested director election to use universal proxy cards that include the name of all board of director nominees (i.e., both dissident and management nominees). As such, shareholders voting by proxy would be able to vote for a combination of management and dissident candidates. Currently, only those shareholders voting in person have the ability to do so.