What has become of one of the biggest corp gov improvements on the activist investing agenda? While proxy access isn’t dead, it sure hasn’t advanced far at all in the past year.

1. Along with declassified BoDs and eliminating poison pills (and unlike majority voting, separating the BoD Chair from CEO title, and numerous other incremental or immaterial corp gov changes), proxy access has the potential really to make life easier for investors. We cover the basics on proxy access here.
   

Relative to the energy and attention proxy access received in 2010 and 2011, when Dodd-Frank mandated it, the SEC proposed rules, and the DC District Court struck down those rules, proxy access has barely registered on investors’ radar. Relative to the number of shareholder proposals it attracted in 2012, there was somewhat less action. Right now 2014 doesn’t look much better.

Proxy Access, by the Numbers

In 2013, 18 companies had proxy access proposals on annual meeting agenda. In contrast, in 2012, 23 companies saw proxy access proposals.

Yet, proxy access proposals succeeded slightly more in 2013. Three (or four, depending on how we count) of the 18 proposals were approved by shareholders, compared to only two (or three, depending on how we count) of the 23 in 2012.

In 2012, a third shareholder proposal was withdrawn, at Hewlett-Packard. The company agreed to propose proxy access itself in 2013, which it did. Shareholders indeed approved it in 2013. We probably shouldn’t count it in both years, so either 2012 had two and 2013 had four, or 2012 and 2013 each had three.

Which Other Proposals Won?

In 2013, shareholders won a majority of votes on proxy access proposals at three companies: CenturyLink, Verizon, and Darden Restaurants. The latter company surprises no one, given the company’s performance and ongoing activist situation.

Interestingly, the Century Link and Verizon proposals came from individual investors, not an institution or hedge fund. The CenturyLink vote was pretty convincing, with 72% of shares voting in favor, while the Verizon vote was much closer, with 53% of shares voting in favor.

Shareholders can also include Western Union as win, although it didn’t go to a vote in 2013. A proxy access proposal there attracted 33% of the votes in 2012, and the company decided to adopt proxy access on its own in 2013.

Which Ones Lost?

Eleven proposals failed to win a majority of votes. The companies were mostly well-known, including Walt Disney, Staples, Charles Schwab, Bank of America, FedEx, Goldman Sachs, and Netflix. On average, the proposals won 20% of the votes, with support as high as 40% (Disney) and as low as 4% (Netflix).

Losing votes at two companies merit comment. At both Chesapeake Energy and Nabors Energy, a majority of shareholders supported non-binding proxy access proposals in 2012. Neither company implemented proxy access after the vote, so in 2013 shareholders again submitted non-binding proxy access resolutions.

At Nabors, the proposal won 51% of the shares voting. The BoD deemed the proposal a failure since it did not win a majority of shares present (which includes abstentions and broker non-votes).

At Chesapeake, the proposal won an astonishing 99% of the shares voting. Yet, the BoD deemed this proposal a failure, too, since it failed to win two-thirds of the shares outstanding.

Indications for 2014

Already, we have two companies with proxy access proposals on the annual meeting agenda. Walgreens had its annual meeting on January 8, where a proposal from activist investor CtW won 28% of the votes. Next, Apple shareholders will consider a proposal from individual investor James McRitchie at its annual meeting on February 28. Finally, Verizon has indicated it will include bylaw amendments implementing proxy access on the agenda at its May 2014 annual meeting, following the 2013 winning vote.

It’s still very early in the year, and companies have not yet sent proxy materials to investors. No major shareholders have identified companies where they have submitted proxy access proposals. So, we don’t know where we investors will need to consider these. But, if this year looks like the past couple, we won’t need to think too hard.