Proxy advisory firm Glass, Lewis & Co. ("Glass
Lewis") recently released its Canadian proxy voting policy for
the 2015 proxy season. Glass Lewis' policies are influential in
that many institutional investors will follow their advice and vote
for or against an issuer's shareholder resolutions based on
Glass Lewis' policies.
Glass Lewis evaluates their guidelines on an ongoing basis and
formally updates them annually. The 2015 guidelines are in a
document which can be accessed here.
A summary of the major changes from prior years' policies
Majority voting – To be
consistent with Toronto Stock Exchange policy, Glass Lewis
recommends that shareholders withhold votes from all members of
those companies' governance committees if the company has not
adopted a majority voting policy. Majority voting policies require
companies to ask for the resignation of director nominees who do
not receive a majority of the votes cast, except in unusual
Shareholder rights plan – Glass
Lewis advises shareholders support a shareholder rights plan, or
poison pill, if in the proposed plan: (a) the trigger threshold is
not unreasonably low (i.e., lower than 20%); (b) the form of offer
does not have to be an all-cash transaction; (c) the offer is not
required to remain open for more than 90 business days; (d) the
offeror is permitted to make amendments to the offer; (e) there is
no fairness opinion requirement; (f) there is a low to no premium
requirement; and (g) the plan does not allow the board the
discretion to amend material provisions absent shareholder
Advance notice policies – Glass
Lewis will generally support advance notice policies so long as the
terms are reasonable and not unduly restrictive for shareholders.
Glass Lewis will support policies that establish a 30 day notice
period and that require a 35 day window during which shareholders
may submit nominations. They recommend to vote against advance
notice provisions if the minimum notice period is either too close
to (e.g., 10 days) or too far in advance of (e.g., 60 days) the
annual meeting. Other factors that should be taken into
consideration include whether the nominations process requires
excessive disclosure requirements, required commitments to abide by
unnecessarily broad or restrictive agreements, or other impediments
that may frustrate a shareholders' ability or willingness to
avail themselves of the nomination process.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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