In a move that could radically alter the way American companies choose their boards, the Securities and Exchange Commission will vote today on a proposal that could make it possible for the ballots distributed by companies to include competing candidates for director, The New York Times reports.
The committee said the commissioners would consider a radically different proposal that would effectively bar shareholders from supporting competing candidates for director unless they were willing to go to the considerable expense of mailing out competing proxies.
Under the first proposal, a shareholder or group of shareholders who owned 5 percent of a company’s stock – a high threshold but one that some institutional shareholders could meet – could propose changes to a company’s bylaws concerning shareholder elections.
If such a proposal were made, then a majority of shareholders could vote to allow competing candidates in future elections. Such candidates would appear on the ballots sent out by companies, providing real elections with winning and losing candidates.