Shareholder Rights Project
The Shareholder Rights Project (SRP) is a clinical program operating at Harvard Law School and directed by Professor Lucian Bebchuk. The SRP works on behalf of public pension funds and charitable organizations seeking to improve corporate governance at publicly traded companies, as well as on research and policy projects related to corporate governance. Any views expressed and positions taken by the SRP and its representatives should be attributed solely to the SRP and not to Harvard Law School or Harvard University.

58 Successful Precatory Proposals by SRP-Represented Investors

This page provides information about the 58 successful precatory board declassification proposals submitted by the SRP and SRP-represented investors for a vote of shareholders at 2012 and 2013 annual meeting of S&P 500 and Fortune 500 companies, as well as the significant number of additional precatory declassification proposals that are expected to pass at 2013 annual meetings by the end of 2013. As explained in further detail below:

As described in the Negotiated Agreements page, through active engagement with companies receiving declassification proposals, the SRP and the institutional investors working with the SRP have been able to reach negotiated outcomes with many of the S&P 500 and Fortune 500 companies receiving proposals in 2012 and 2013. In other companies receiving proposals, however, the SRP and the institutional investors working with the SRP have not been able to obtain such negotiated outcomes and proposals therefore went to a vote.

Successful 2012 precatory proposals: Altogether there are 41 S&P 500 companies where shareholder proposals by SRP-represented investors went to a vote at 2012 annual meetings.

Of the 41 proposals that went to a vote in 2012, 39 proposals (listed in Panel A of Table 1 below) passed. These 39 successful proposals represented more than 60% of the shareholder proposals by public pension funds that received majority support in 2012, and more than 30% of all precatory shareholder proposals (by all proponents) that received majority support in 2012. Table 1 contains links to each precatory declassification proposal as included in each company’s proxy statement.

The 39 successful proposals received average support of 82% of votes cast, a substantial majority of the shareholders voting on the proposal (the two proposals that did not pass achieved average support of 48% of votes cast). It is expected that a significant proportion of these 39 companies will follow the clearly-expressed preferences of their shareholders, and the SRP and SRP-represented investors have been engaging with these companies to facilitate such outcomes.

In particular, the boards of eight companies where proposals passed (listed in Panel B of Table 1 below) have already announced moves in the direction recommended by the shareholders. At three of these companies, where the classified board structure was established in the bylaws (which, unlike certificates of incorporation, can be amended by boards without shareholder approval), boards implemented the preferences expressed in the shareholder votes by amending the bylaws of the corporation to eliminate the classified board. In addition, five companies where shareholder proposals passed have publicly announced that they will bring management declassification proposals at their 2013 annual meetings. It is expected that a significant number of additional companies will also move towards annual elections during the course of 2013.

Successful 2013 precatory proposals: Of the S&P 500 and Fortune 500 companies where shareholder declassification proposals submitted by SRP-represented investors are expected to be voted on in 2013, proposals have already gone to a vote at 20 companies. Of these companies, 19 proposals passed (listed in Panel A of Table 2 below), receiving average support of 79% of votes cast (the one proposal that did not pass achieved a support of 49.8% of votes cast).

Many 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. Panel B of Table 2 below lists those of the S&P 500 and Fortune 500 companies where that have already publicly announced the precatory declassification proposals planned to go to a vote. Table 2 also contains links to each precatory declassification proposal as included in each company’s proxy statement, and will be updated periodically as additional precatory proposals submitted by the SRP on behalf of SRP-represented investors go to a vote at 2013 annual meetings and as additional companies publicly announce such proposals. As was the case with successful 2012 proposals, it is expected that board declassifications will result from a significant proportion of the successful 2013 proposals that pass.


Table 1: Successful 2012 Precatory Proposals

Company Proponent
Panel A: 2012 Precatory Proposals that Passed
Airgas, Inc. (ARG)
(Company Filing)
LACERA
Apache Corporation (APA)
(Company Filing)
ISBI
Baxter International Inc. (BAX)
(Company Filing)
NCF
Bemis Company (BMS)
(Company Filing)
NCDST
Best Buy Co, Inc. (BBY)
(Company Filing)
NCF
CF Industries Holdings, Inc. (CF)
(Company Filing)
LACERA
CareFusion Corporation (CFN)
(Company Filing)
LACERA
CarMax, Inc. (KMX)
(Company Filing)
NCF
Cerner Corporation (CERN)
(Company Filing)
ISBI
Chipotle Mexican Grill, Inc. (CMG)
(Company Filing)
ISBI
Cognizant Technology Solutions Corporation (CTSH)
(Company Filing)
LACERA
DENTSPLY International Inc. (XRAY)
(Company Filing)
LACERA
EQT Corporation (EQT)
(Company Filing)
OPERS
Edwards Lifesciences Corporation (EW)
(Company Filing)
ISBI
F5 Networks, Inc. (FFIV)
(Company Filing)
ISBI
FLIR Systems, Inc. (FLIR)
(Company Filing)
NCF
FMC Corporation (FMC)
(Company Filing)
NCF
Hess Corporation (HES)
(Company Filing)
NCDST
Lexmark International, Inc. (LXK)
(Company Filing)
NCDST
Limited Brands, Inc. (LTD)
(Company Filing)
ISBI
Lorillard, Inc. (LO)
(Company Filing)
ISBI
MEMC Electronic Materials, Inc. (WFR)
(Company Filing)
NCDST
Masco Corporation (MAS)
(Company Filing)
ISBI
Moody's Corporation (MCO)
(Company Filing)
NCF
Netflix, Inc. (NFLX)
(Company Filing)
LACERA
People’s United Financial, Inc. (PBCT)
(Company Filing)
NCDST
QEP Resources, Inc. (QEP)
(Company Filing)
ISBI
Quest Diagnostics Incorporated (DGX)
(Company Filing)
ISBI
Red Hat, Inc. (RHT)
(Company Filing)
LACERA
Ryder System, Inc. (R)
(Company Filing)
NCDST
SCANA Corporation (SCG)
(Company Filing)
NCDST
salesforce.com, inc. (CRM)
(Company Filing)
NCF
Snap-On Incorporated (SNA)
(Company Filing)
NCDST
The J. M. Smucker Company (SJM)
(Company Filing)
LACERA
US Steel Corporation (X)
(Company Filing)
NCDST
Urban Outfitters, Inc. (URBN)
(Company Filing)
ISBI
V.F. Corporation (VFC)
(Company Filing)
NCF
Vornado Realty Trust (VNO)
(Company Filing)
ISBI
Vulcan Materials Company (VMC)
(Company Filing)
ISBI
 
Panel B: Companies Announcing Moves Towards Annual Meeting Following Successful 2012 Precatory Proposals
Apache Corporation (APA)
(Company Filing)
ISBI
Bemis Company (BMS)
(Bylaw Amendments)
NCDST
CF Industries Holdings, Inc. (CF)
(Company Filing)
LACERA
F5 Networks, Inc. (FFIV)
(Company Filing)
ISBI
MEMC Electronic Materials, Inc. (WFR)
(Company Filing)
NCDST
Quest Diagnostics Incorporated (DGX)
(Company Filing)
ISBI
Urban Outfitters, Inc. (URBN)
(Bylaw Amendments)
ISBI
V.F. Corporation (VFC)
(Bylaw Amendments)
NCF

Table 2: Successful 2013 Precatory Proposals

Company Proponent
Panel A: 2013 Precatory Proposals that Passed
Air Products and Chemicals, Inc. (APD)
(Company Filing)
PRIM
Airgas, Inc. (ARG)
(Company Filing)
LACERA
Ashland Inc. (ASH)
(Company Filing)
PRIM
BorgWarner, Inc. (BWA)
(Company Filing)
NCF
Costco Wholesale Corporation (COST)
(Company Filing)
PRIM
Foot Locker, Inc. (FL)
(Company Filing)
NCDST
Huntsman Corporation (HUN)
(Company Filing)
SBA
Jacobs Engineering Group Inc. (JEC)
(Company Filing)
PRIM
Jarden Corporation (JAH)
(Company Filing)
NCDST
Kellogg Company (K)
(Company Filing)
NCDST
NCR Corporation (NCR)
(Company Filing)
SBA
Netflix, Inc. (NFLX)
(Company Filing)
SBA
Rockwell Collins, Inc. (COL)
(Company Filing)
PRIM
SCANA Corporation (SCG)
(Company Filing)
SERS
Teradata Corporation (TDC)
(Company Filing)
NCDST
Varian Medical Systems, Inc. (VAR)
(Company Filing)
PRIM
United States Steel Corporation (X)
(Company Filing)
NCDST
Vornado Realty Trust (VNO)
(Company Filing)
ISBI
WESCO International, Inc. (WCC)
(Company Filing)
LACERA
 
Panel B: 2013 Precatory Proposals to be Voted on (Partial)