GE has voluntarily adopted a proxy access by-law proposal. The by-law permits a shareowner, or a group of up to 20 shareowners, owning 3% or more of the Company’s outstanding common stock continuously for at least three years to nominate and include in the Company’s proxy materials directors constituting up to 20% of the board, provided that the shareowner(s) and the nominee(s) satisfy certain requirements. As near as I can tell, GE did not submit a no-action letter to exclude a similar shareholder proposal, but that doesn’t mean they didn’t get one.
HCP, Inc. has also adopted a voluntary proxy access by-law. HCP was on the “list” targeted by the New York City Comptroller. HCP’s by-law permit any stockholder or group of up to ten stockholders who have maintained continuous qualifying ownership of 5% or more of HCP’s outstanding common stock for at least the previous three years to include a specified number of director nominees in the Company’s proxy materials for an annual meeting of stockholders. A nominating stockholder is considered to own only the shares for which the stockholder possesses the full voting and investment rights and the full economic interest (including the opportunity for profit and risk of loss). Under this provision, borrowed or hedged shares do not count as “owned” shares. Further, to the extent not otherwise excluded pursuant to this definition of ownership, a nominating stockholder’s “short position” as defined in Rule 14e-4 under the Securities Exchange Act of 1934, as amended, is deducted from the shares otherwise “owned.” If a group of stockholders is aggregating its shareholdings in order to meet the 5% ownership requirement, the ownership of the group will be determined by aggregating the lowest number of shares continuously owned by each member during the three-year holding period.
A third issuer, also on the NYC “list,” has also adopted a proxy access by-law. The by-law permits any stockholder or group of up to 20 stockholders who have maintained continuous qualifying ownership of 5% or more of the issuer’s outstanding common stock for at least the previous three years to include a specified number of director nominees in the Company’s proxy materials for the annual meeting of stockholders. A nominating stockholder is considered to own only the shares for which the stockholder possesses the full voting and investment rights and the full economic interest (including the opportunity for profit and risk of loss). Under this provision, borrowed or hedged shares do not count as “owned” shares.
