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.