January 11, 2023

Universal Proxy: Important Players Haven’t Weighed-in on Advance Notice Bylaw Amendments

We’ve blogged a few times about bylaw amendments that companies are considering in light of the advent of the universal proxy era. Some of these changes are fairly non-controversial, but those involving substantive changes to advance notice bylaws have provoked a strong reaction from activist shareholders and their advisors. This recent Debevoise memo reviews the general categories of terms being addressed by these amendments & says that companies should proceed with caution, because a lot of key constituencies haven’t weighed in on them yet:

While we are seeing a number of companies amend, or explore amending, their bylaws, some caution is warranted. Organizations such as Institutional Shareholder Services, Glass Lewis, the Council of Institutional Investors and many major institutional investors are still formulating their positions with respect to bylaw amendments adopted in the wake of the universal proxy rules.

The memo says that once proxy advisors and institutions weigh in on specific bylaw changes and after newly adopted bylaws are battle-tested during the 2023 proxy season, strategies for bylaw amendments may evolve.

John Jenkins