Dialogue

The latest reporting, opinion and research on executive compensation. We don’t necessarily agree with it all, but we provide it here for consideration.

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Week of
January 19, 2015

Quick Picks

SEC Reversal May Clear Way for Shareholders to Challenge Companies | The New York Times (subscription required) | January 19, 2015

The SEC's recent reversal on its proxy access policy could lead to an increased number of shareholders seeking the ability to nominate directors at annual meetings. While the SEC continues to review this matter, the agency announced on January 16 that companies are no longer permitted to block shareholder proposals simply because they resemble management proposals, a defense known as ‘no-action letters.’ The author believes it is unclear how companies will respond to the reversal. Read more

Director Tenure: A Solution in Search of a Problem | Latham & Watkins LLP | January 23, 2015

Director term limits continue to be a prominent issue in corporate governance. Proponents argue that directors lose their independence over time, while critics suggest that term limits deprive companies of well-seasoned and effective directors. Scott Herlihy, a partner at Latham & Watkins LLP, touts the benefits of long-term director retention, including enhanced oversight capabilities, increased awareness and familiarity with management, and a better understanding of the company's strategic challenges. Further, he argues, optimal director tenure could vary across industries and companies, making it difficult to establish a universal policy. Read more

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