A Securities and Exchange Commission effort to rewrite the rules for proxy fights that pit dissident directors against incumbent boards is more likely than ever to die on the vine.
It's doubtful that an agency chief under the incoming Trump administration will have any interest in adopting the rule, proposed in October, since it's opposed by the U.S. Chamber of Commerce and could increase the likelihood of proxy fights.
Also like to be nonstarters are a proposal under consideration by the SEC and other regulators requiring big financial firm executives to wait much longer to cash out bonuses as well as one that gives the same institutions several years to claw back CEO pay connected to misconduct. A major effort driven by Sen. Elizabeth Warren and other Democrats to set up a political spending disclosure rule also isn't expected to see the light of day in the Trump administration.
"I can't see why they would go forward with those," said Roel Campos, a former Democratic commissioner who overlapped at the agency with the Trump administration's adviser on the SEC, Paul Atkins. "They will die or stay dead."
The proxy fight proposal is designed to give shareholders more flexibility to choose between incumbent board members and dissident candidates that activists like Starboard Value or Elliott Management often seek to install to help drive their M&A or operational change agendas.
Currently, shareholders who don't go to company meetings can vote only for the director candidates offered on the activist's proxy card or those on the company's card. They can't support only a few of each.
The SEC's proposed rule would require both the protagonist and the incumbent board to issue universal proxy cards giving shareholders the ability to pick and choose from all candidates.
Some observers say the move would hurt activists because it would make it less likely their full slate would be elected. Others argue that it would offer them the opportunity to get at least some of their nominees onto a board.