Reply #9: SEC stirs opposition on shareholder move

[ozymandius]

WASHINGTON - Federal securities regulators appear primed to allow companies to bar shareholders from access to ballots for board elections, a move that major pension funds and governance advocates say could make corporations less responsive to investors' interests.

The shareholder rights issue is one of the most controversial to come before the Securities and Exchange Commission in recent years, generating more than 34,000 comment letters to the agency. The vacancy of a Democratic seat on the five-member panel has added to the friction. Democrat Roel Campos, who left in September, likely would have voted to adopt a proposal making it easier and cheaper for dissident shareholders to elect candidates they back to a company's board.

That proposal would allow shareholders who together own at least 5 percent of a company's stock to propose changes to the company's bylaws on elections for directors.

Proposed bylaw changes could then be voted on by all shareholders, giving stock holders the right to get their board candidates on ballots that have been paid for and distributed by companies.

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Last week, a dozen big pension funds and a government employees' union made last-ditch efforts to persuade SEC Chairman Christopher Cox, a Republican, not to proceed with the vote. Cox has said he wants new shareholder-rights rules in place before the corporate proxy season begins next spring.

The American Federation of State, County and Municipal Employees, or AFSCME, threatened to sue the SEC if the less expansive rule is adopted. The 12 pension funds — including the nation's largest, the California Public Employees' Retirement System — together own more than $300 billion worth of stock in U.S. companies. Their officials wouldn't comment on possible litigation but said the funds had sent "urgent letters" to Cox, pressing him to delay the vote until all five seats on the SEC are filled.

http://news.yahoo.com/s/ap/20071128/ap_on_bi_ge/sec_investor_access