It turns out Sam Zell is ready for reform, after all. So are Allstate, McDonald’s and Walgreens Boots Alliance.
Like Zell’s publicly traded apartment-building company, Equity Residential, they’ve recently enacted “proxy access” bylaws allowing shareholders to nominate directors through company proxy statements. It’s a turnabout for three of the four, which opposed proxy access proposals put forward by shareholders last spring. Allstate faced no such proposal at its 2015 annual meeting.
They join a growing list of public companies surrendering on proxy access. Some 80 U.S. companies adopted it this year, bringing the nationwide total to 94, says Peter Kimball, vice president at ISS Corporate Solutions, a corporate governance adviser in Rockville, Md.
“This has been the big story of corporate governance in 2015, and I think it’s going to remain the big story in corporate governance in 2016,” Kimball says, predicting as many as 200 companies could face proxy access proposals next year.
He credits the momentum to two factors: A Securities and Exchange Commission ruling that companies can’t pre-empt shareholder proposals by offering a more-restrictive version of proxy access, and a push by New York City Comptroller Scott Stringer, who oversees a $163 billion retirement fund that put proxy access measures on the ballot at 75 companies this year.
Proxy access proposals won shareholder votes at 60 of 100 companies, including Oak Brook-based McDonald’s and Chicago-based Equity Residential. Although the measures were only advisory, they got company leaders thinking—and talking to major shareholders. Even Deerfield-based Walgreens, where a proxy access proposal won just 40 percent of the vote, asked investors about proxy access. It appears they got an earful.
“It was clear through discussions and input from a number of our investors that there was support for proxy access, and our board believes this new bylaw is structured in a way that will best serve the interests of our stockholders,” Walgreens spokesman Michael Polzin says. McDonald’s and Equity Residential also attribute their change of heart to conversations with investors. Northbrook-based Allstate didn’t return calls seeking comment.