Legal news and trends for Canadian in-house counsel and c-suite executives
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has slowed considerably, companies like his are still very active. He says the run up to the 2009 proxy season has been a very ac- tive one with shareholder proposals, some centering on pay is- sues where stockholders get to determine executive remunera- tion. "What we are learning from the banks is that there are an inordinate number of shareholder proposals that have been sent to the financial institutions . . . primarily on compensation issues, say for pay variations, more disclosure, and that sort of thing, pay for performance." Keeling says there is an "overwhelming lack of preparedness" added to the inordinate amount of shareholder proposals. "This is an interesting time, people with cash or with a dis- taste for the way companies have been run, seeing the stocks slide, are going to in some cases mount a threat." If that isn't enough to scare boards into looking at any poten- tial issue their shareholders are harbouring, Allen offers a little more insight. "One of the questions we are getting a lot now from prospective clients is can you potentially do some identi- fication of some other key shareholders in a company" to iden- tify who is holding the shares at any point in time. Given the level of unpreparedness his partner identified and the greater number of shareholder proposals, it would seem these queries could be coming from both companies and concerned share- holder groups alike. "There have been numerous actions that have taken place under the guise of 'a routine meeting.'" For Rhonda Brauer, senior managing director, corporate governance, at Georgeson in New York City, it is a pretty sim- ple equation. "What we are hearing is that right now no one has access to capital, that'll change soon and when it does, companies could be the subject of hostel takeover activities. The companies with the lower stock prices are going to be the likely targets." Brauer says boards need to get active, that it is "a time to know [whom] your shareholders are," especially those sharehold- ers that have had issues with the company. She says what she is hearing is that companies are getting scared, and while the shareholders' so-called Christmas wish list of new measures like say-on-pay may not come as quickly as they would like, the vic- tory of president-elect Barack Obama who supported the pro- shareholder initiative at the Senate level, should be a signal that those measures are not too far off. The typical catchphrases come into play: prepare for the un- expected, talk to RiskMetrics/ISS, consider the preparedness of your board, and consider if anti-takeover measures are in place. Compensation issues and whether or not boards have adopted shareholder motions all have impact on whether or not a com- pany is ripe for takeover or lesser, yet still punishing, measures including withholding votes. IH Our Team of Barristers in Ontario Courtrooms Since 1988. TORONTO LITIGATION COUNSEL Multi-jurisdictional Estate Litigation: Eric Polten (1974 call; Stanford; U Toronto) Employment & Business Litigation: J. Gardner Hodder (1985 call; Harvard; U Penn.; U Toronto) EFFICIENCY TIMELINESS Adelaide Place 181 University Avenue, Suite 2200 Toronto, Canada M5H 3M7 www.poltenhodder.com PoltenHoddler-V2_IH_Dec#6_08.indd 1 C ANADIAN Lawyer INHOUSE DECEMBER 2008 19 12/1/08 8:36:48 AM RESULTS T: (416) 601-6766 F: (416) 947-0909 Email: info@poltenhodder.com