SEC Mandates Use of Universal Proxy Cards in Contested Director Elections


On November 17, 2021, the Securities and Exchange Commission (“SEC”) voted to amend the federal proxy rules to mandate the use of universal proxy cards in contested director elections.  Currently, shareholders voting by proxy are generally limited to selecting director candidates nominated by the soliciting party.  However, shareholders voting in person commonly cast votes through written ballots which include the names of all director nominees.  The SEC’s new rules require that shareholders only receive one proxy card containing the names of all director nominees in a proxy contest.  These rules align shareholders’ ability to vote for candidates irrespective of whether the vote is submitted in-person or by proxy.

Pursuant to the newly adopted rules, among other things:

  • Universal proxy cards must be used by all participants in a non-exempt director election contest.  The universal proxy card must include the names of both registrant and dissident nominees;
     
  • Dissidents must provide registrants with notice of their intent to solicit proxies and provide the names of their nominees no later than 60 calendar days before the anniversary of the previous year’s annual meeting;
     
  • Registrants must provide dissidents with the names of the registrants’ nominees no later than 50 calendar days before the anniversary of the previous year’s annual meeting; and
     
  • Dissidents are required to solicit 67% of the voting power of shares entitled to vote in the election.

The new rules are in effect for any shareholder meeting with a contested election held after August 31, 2022.  The full text of the final rule can be found here.

About Faruqi & Faruqi, LLP

Faruqi & Faruqi, LLP focuses on complex civil litigation, including securities, antitrust, wage and hour and consumer class actions as well as shareholder derivative and merger and transactional litigation. The firm is headquartered in New York, and maintains offices in California, Georgia and Pennsylvania.

Since its founding in 1995, Faruqi & Faruqi, LLP has served as lead or co-lead counsel in numerous high-profile cases which ultimately provided significant recoveries to investors, direct purchasers, consumers and employees.

To schedule a free consultation with our attorneys and to learn more about your legal rights, call our offices today at (877) 247-4292 or (212) 983-9330.

Tags: Christopher Lash, Faruqi & Faruqi, Faruqi and Faruqi, Faruqilaw, SEC Faruqi & Faruqi Faruqi & Faruqi

New York office
Tel: (212) 983-9330
Fax: (212) 983-9331

Finding us

Our Offices


Our offices are nationwide. If you have any questions about a case or our firm, please contact us.

New York

685 Third Avenue 26th Floor
New York, New York 10017
(212) 983-9330
(877) 247-4292
(212) 983-9331

California

1901 Avenue of the Stars Suite 1060
Los Angeles, California 90067
(424) 256-2884
(424) 256-2885

Georgia

3565 Piedmont Road NE Building Four, Suite 380
Atlanta, Georgia 30305
(404) 847-0617
(404) 506-9534

Pennsylvania

1617 JFK Boulevard, Suite 1550
Philadelphia, Pennsylvania 19103
(215) 277-5770
(215) 277-5771

Faruqi & Faruqi office in New York, New York

Faruqi & Faruqi office in Los Angeles, California

Faruqi & Faruqi office in Atlanta, Georgia

Faruqi & Faruqi office in Philadelphia, Pennsylvania