Introduction

After considering proxy access for 30 years, the Securities and Exchange Commission (the “SEC”) on August 25, 2010 voted 3-2 to adopt a proxy access rule (the “proxy access rule”). The rule was published in the Federal Register on September 16, 2010, and will become effective on November 15, 2010. The adoption and publication of the proxy access rule, along with the onset of mandatory, non-binding “Say on Pay” votes on executive compensation as mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), mark the beginning of a new era in the relationship between the board of directors of a public company and its shareholders. This Legal Alert will discuss the most significant provisions of the proxy access rule and analyze its impact on public companies, before summarizing steps a board of directors should take in preparation for the new world order.