Funds Appeal SEC Staff Disney Proxy Access Decision

The funds’ appeal to the US Securities and Exchange Commission (SEC) followed word on Tuesday that SEC staff members had reversed their earlier decision and were now siding with the company’s efforts to keep a shareholder director nomination proposal from being considered at its annual meeting, Dow Jones reported (See  SEC Staff Does About Face on Disney Proxy Issue  ). Even though SEC staff had originally told Disney on December 8 it could not exclude the funds’ director nomination plan from its annual proxy materials, an SEC official doubled back on that judgment this week by telling the entertainment company that staff members had now decided there was “some basis” for its efforts to block the funds’ proposal.

In their appeal letter, the funds demanded that if the commission agrees with its staff, that it also decide the broader issue of shareholders’ general access to the proxy materials sent to shareholders before annual meetings.

“In the event that the commission declines to review staff’s position, we request that the commission direct the staff to explain its position so that shareholders and public companies have clear guidance on the viability of open access shareholder proposals and properly draft any such proposals,” the pension group said in a December 29 letter to SEC Chairman William Donaldson.

 Involved in pushing the director nomination initiative are:

• the American Federation of State, County and Municipal Employees Pension Funds
• the California Public Employees’ Retirement System
• the Illinois State Board of Investment
• the New York State Common Retirement Fund.

The SEC has been pondering the issue of shareholder access to corporate ballots and has already proposed a rule making it easier for shareholders to nominate their own board candidates using company-issued proxy ballots. More information about the SEC’s delilberations is at http://www.sec.gov/spotlight/dir-nominations.htm .