On November 17, 2021, the Securities and Exchange Commission
(SEC) adopted rules to require the use of universal proxy cards in
director election contests. Universal proxy cards, which list all
duly-nominated director candidates from all parties, allow
shareholders to vote through the proxy process in the same manner
as they could by voting in person.
What are the existing rules?
In a contested director election, shareholders vote, or give
voting instructions by proxy, for two competing slates of director
nominees. One slate is proposed by the company's board of
directors, the "company slate," and the other slate is
from dissident shareholders, the "dissident slate." Under
current rules, shareholders voting by proxy in contested director
elections are unable to vote for a combination of director nominees
from the company slate and the dissident slate, as such
shareholders could if they voted in person at the shareholder
meeting.
