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SEC No Longer Allows “Vote with the Board’s Recommendation” Option

Posted in SEC News

As the 2013 proxy season approaches, Broadridge Financial Systems has informed its customers that it will no longer be permitted to present shareholders with a “Vote with the Board’s Recommendations” button when soliciting proxies or voting instructions online, over the telephone or through other voting platforms. The SEC has apparently taken a new interpretative position that the button is not permitted unless shareholders are also presented with a “Vote against the Board’s Recommendations” button. The SEC has not provided any insight into the new interpretative position, but the suggestion of a button to vote against the board’s recommendations seems problematic in the context of director election proposals and say on pay frequency votes. Broadridge says these technical complications make the proposed button not currently feasible. Of course, the bigger issue is the perceived negative impact such a button would have on retail voting.