The SEC’s “unbundling” requirements have largely been the stuff of SEC lore -- periodically referred to but rarely seen in corporate governance matters. However, thanks to the high profile dispute between David Einhorn’s Greenlight Capital and Apple, the unbundling rules may finally be coming out of the shadows. As a result, companies should carefully consider their application when preparing their proxy materials, especially those that may come under attack by shareholder activists.

Background on the Unbundling Rules -

The SEC’s unbundling rules effectively require a distinct shareholder vote on each “separate matter” listed on a company’s proxy card, regardless of the state law requirement that would be required to approve the matter. Although the rules technically apply to any matter submitted for a shareholder vote, in our experience they have most often been implicated in connection with merger transactions and have rarely arisen in the context of a corporate governance matter (as they did in the Greenlight/Apple dispute)...