Friday, September 08, 2006

Court Decision Prompts S.E.C. to Revisit a Rule on Shareholder Proposals

A federal appeals court has at least temporarily cleared the way for shareholders to force companies to hold contested elections for directors, with rival candidates appearing on the ballots distributed by companies.
That is something that most companies strongly oppose. The Securities and Exchange Commission has until now allowed companies to refuse to allow shareholders to vote on such proposals.
The decision, issued Tuesday, led the commission to announce yesterday that it would take up the issue at a meeting on Oct. 18 and consider changing its rules. The S.E.C. chairman, Christopher C. Cox, did not say what action he favored, but promised that new rules would take effect in time for annual meetings in early 2007.

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