Why Is There No Withhold Box?


The Securities and Exchange Commission has long required that a form of proxy relating to matters other than election to office provide a means to specify by boxes a choice between approval or disapproval of, or abstention with respect to, each separate matter to be voted on at the meeting. Rule 14a-4(b)(1). More recently, the SEC in its final Say-on-Pay rules has required that a form of proxy include an abstention option with respect to the advisory vote on the frequency of advisory votes on executive compensation. Rule 14a-4(b)(3). Notably, the SEC does not require that a proxy offer shareholders the option to withhold authority to vote on these matters.[1]

Is this a mere technical oversight or could the inclusion of a “withhold” option make a difference? The answer would seem to depend on the voting rule being applied to the particular question and how the courts will view a withhold instruction.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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