Clorox to Open Board Nominations to Certain Shareholders
August 28 2015 - 7:00PM
Dow Jones News
Clorox Co. has adopted a so-called proxy-access policy allowing
certain shareholders to nominate members to its board, the company
said Friday.
The Securities and Exchange Commission brought the issue to the
forefront in 2010, adopting a rule that required companies to list
shareholder nominees on corporate proxy ballots, rather than
mailing separate ballots and waging a potentially costly campaign.
A federal appeals court ruled against the SEC, however, saying the
agency hadn't adequately analyzed the costs and impact, and failed
to prove its claim that the change would improve shareholder value
and board performance.
Companies have increasingly adopted changes in governance that
are considered more favorable to investors, with proxy access
provisions being by far the most popular—and successful—in 2015,
according to Institutional Shareholder Services, the biggest U.S.
proxy-advisory firm.
Most of those proposals, ISS said, are modeled on the SEC's 2010
proxy-access rule and call for a 3%, three-year ownership
requirement and up to 25% of board seats.
Under Clorox's new guidelines, shareholders with at least 3% of
the company's shares outstanding and who have held the shares for
at least three years will be able to nominate candidates for up to
20% of the board. Up to 20 shareholders can combine their stakes to
reach the 3% ownership threshold.
Clorox's directors are elected annually by majority vote.
Currently, 10 of the 11 directors are independent, with the
company's chief executive being the only management director.
In a regulatory filing Friday, the Oakland, Calif., company said
it had been considering the change as part of a broader
corporate-governance practices review when it received a
proxy-access proposal for its annual shareholder meeting, which
will be held in November.
"After thoughtful dialogue and input from some of our largest
stockholders, our board decided to adopt a proxy access framework
that we believe best serves our company and our stockholders," the
company said.
Clorox, which in 2011 defended itself against a hostile takeover
from billionaire Carl Icahn , cautioned against such shareholder
activism in its latest annual financial report with the Securities
and Exchange Commission.
Write to Maria Armental at maria.armental@wsj.com
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(END) Dow Jones Newswires
August 28, 2015 19:45 ET (23:45 GMT)
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