Divisive Shareholder Ruling
Los Angeles Times
Friday, October 13, 2006
The Securities and Exchange Commission clouded the 2007
corporate proxy season with uncertainty by delaying action on a
rule for handling shareholder proposals, investor activists said
In a move sure to invite a barrage of lobbying, the SEC said it
would wait until mid-December to clarify questions raised by a
September federal appeals court decision that revived a
long-standing debate about the power of shareholders in
The SEC was expected to respond to the court decision next
week. But its five commissioners were unable to agree on what
to do and pushed back a decision to Dec. 13.
Now, it's unlikely that any SEC rule change would take full
effect before proxy season is well underway, sowing confusion.
"The delay may inadvertently have caused a timing problem, with
some companies that are going to be unclear on how to proceed,"
said Thomas Lehner, director of public policy for the Business
Roundtable, a lobbying group for CEOs.
SEC Commissioner Annette L. Nazareth defended the delay.
"We've decided not to do some quick fix next week…. We're going
to take some time to take a more organic approach," she told
reporters after a speech in Washington.
Shareholder activists welcomed the postponement.
"Given the sharp division of opinion on this, you can assume the
SEC will be heavily lobbied on both sides of the issue in the
next couple of months," said Barbara Roper, investor advocate at
the Consumer Federation of America.
The Council of Institutional Investors applauded the SEC's move
to let the court decision stand, calling it "great news for