On September 1, 2022, we saw the dawn of a new era in proxy fights. On that day, new and amended Securities and Exchange Commission rules went into effect requiring the mandatory use of universal ballots or universal proxy cards (UPC) in virtually all non-exempt proxy fights. A universal proxy card is one on which the issuer and the dissident nominees are listed on each side’s proxy card.
The UPC provides a shareholder voting by proxy with the same rights as if they attended the shareholder meeting. If a shareholder goes to a shareholder meeting, they are given a ballot that lists the nominees for both management and the dissident. This allows the shareholder to pick and choose candidates from either side. The universal proxy card allows a shareholder to vote for a combination of management and dissident nominees. Just as they could if they went to the shareholder meeting and voted by ballot.
The new rules represent a major change to the proxy rules that will:
- Impact strategic planning in proxy fights.
- Impose new timing requirements on issuers and dissidents.
- Potentially increase the overall number of proxy fights and threatened proxy fights.
- Potentially increase the number of settlements, since some issuers may be wary of waging fights that expose the «weakest» incumbent directors.
- Fundamentally change how proxy fights are run.
Learn what these changes mean to the future of proxy fights .