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Making 'Great Deal of Progress' On Proxy Access, SEC's Cox Says
By Judith Burns
The Wall Street Journal
Friday, March 9, 2007

WASHINGTON -- Securities and Exchange Commission Chairman Christopher Cox said Thursday that regulators have made good progress in addressing a thorny question concerning shareholder democracy and will propose a final rule this year that will favor investors.

"We've made a great deal of progress," Mr. Cox told reporters after a speech to a corporate lawyers' conference. He told Dow Jones Newswires that he expects the agency will finalize a definitive rule this year, in time for corporate annual meetings in 2008.

Mr. Cox said an SEC rule addressing shareholder access to corporate proxy ballots will be proposed, rejecting suggestions the agency might favor management who oppose giving shareholders access to the company's proxy ballot.

Technology, including use of electronic proxies, will be part of a solution, Mr. Cox indicated. He noted that costs of running a proxy campaign have always been at the center of the proxy-access issue, but said costs should fall dramatically if companies replace traditional mail with Internet communication and voting.

The SEC has wrestled with the proxy-access issue since a federal court ruling last September rejected its staff's long-standing approach and sided with shareholder activists. Shareholder advocates want the ability to put their own candidates for directors on corporate proxy ballots, eliminating the cost entailed in a full-blown proxy contest, while opponents say that will give too much power to special-interest groups and make it harder to attract and retain directors.

Mr. Cox originally promised the SEC would clarify matters in time for corporate annual meetings in 2007, but the agency has yet to take any formal action. Asked about the matter at a press conference Thursday, Mr. Cox said he disagreed with reports that the SEC is dragging its feet on the controversial issue.

Mr. Cox's prepared remarks to the corporate law group focused on new SEC rules for reporting executive pay and perks, and he announced the agency will use data-tagging technology to highlight compensation practices at some of the largest U.S. companies.

SEC officials will tag executive-compensation data and post results on the SEC's Web site, according to Mr. Cox, making results for several hundred large U.S. firms available in June.

Data tagging, using software such as "extensible business reporting language", applies a tag to individual bits of information, much like a bar code, allowing the information to be easily compared and analyzed. Mr. Cox has championed use of such technology for corporate reports and the SEC already is testing use of corporate quarterly and annual reports using data tags.

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