The Shareholder Rights Project (SRP) is representing and advising eight institutional investors, seven public pension funds and one foundation. These investors serve more than 3 million people, and the aggregate value of assets that they manage exceeds $400 billion. Additional information about each of the SRP-represented investors is provided here.
The SRP provides SRP-represented investors with a range of services, including assistance in connection with selecting companies for proposal submission, designing proposals, submitting proposals on behalf of represented investors, engaging with companies, negotiating and executing agreements by companies to bring management declassification proposals, and presenting proposals at annual meetings.
The SRPís work during 2012 focused on board declassification proposals that were submitted for the 2012 annual meetings of 89 S&P 500 companies that had a classified board. A detailed review of all the outcomes of this work is provided in the SRPís 2012 annual report, available here. The SRPís work during 2013 has focused on shareholder declassification proposals that the SRP has submitted on behalf of SRP-represented investors for a vote at the 2013 annual meetings of 76 S&P 500 and Fortune 500 companies (a list of the 76 companies that received proposals is available here).
Main results of the SRP's work during 2012 and 2013 thus far include the following:
- 99 Successful engagements: 99 of the companies receiving proposals in 2012, 2013 or both – about three-quarters of such companies – have agreed to move toward annual elections following the submission of board declassification proposals for 2012 and 2013 meetings. Further details on these successful engagements are available on the Negotiated Agreements page.
- 80 Board declassifications: A total of 80 S&P 500 and Fortune 500 companies have already declassified during 2012 and 2013 as a result of the work by the SRP and SRP-represented investors (listed on the Declassifications page). These declassified companies had an aggregate market capitalization exceeding one trillion dollars as of July 15, 2013. A significant number of additional declassifications are expected to result as agreed-upon management declassification proposals go to a vote at other companies that have entered into agreements to bring such management proposals to a vote.
- 58 Successful proposals: 58 precatory declassification proposals have already passed (listed on the Successful Proposals page) – 39 proposals passed at 2012 meetings, with average support exceeding 82% of votes cast, and 19 proposals passed at 2013 meetings, with average support exceeding 79% of votes cast. Additional precatory declassification proposals are expected to pass by the end of 2013 as additional proposals submitted by the SRP on behalf of SRP-represented investors go to a vote at 2013 annual meetings.
Annual elections are widely viewed as corporate governance best practice. Board declassification and the resulting annual elections could make directors more accountable and thereby contribute to improving performance and increasing firm value. The substantial shareholder support for board declassification, and the value of the work done on the subject by the SRP and SRP-represented investors, are described in a two pieces by the SRP’s director – a New York Times DealBook column entitled “Giving Shareholders a Voice,” and a response to critics entitled “Wachtell Lipton was Wrong about the Shareholder Rights Project.” Recent shareholder proposals submitted by the SRP on behalf of its clients, which note evidence of the benefits of declassification and shareholder support, are available here.
The SRP’s director is Lucian Bebchuk. Its 2012-2013 advisory board includes Richard Breeden, Jesse Fried, Jeffrey Gordon, Reinier Kraakman, and Peter Mixon. Scott Hirst serves as the SRP’s Associate Director, and June Rhee serves as Counsel.
Inquiries about the SRP should be directed to Emily Lewis, the SRP’s Administrative Director.