SEC to propose new proxy rules

The Securities and Exchange Commission will float a proposal this summer to address controversy over shareholder democracy and aim to have new rules in place by fall, in time for corporate annual meetings in 2008, SEC Chairman Christopher Cox said Monday.

Cox told reporters he expects the SEC to issue a proposal, perhaps by early summer, addressing shareholders’ ability to nominate corporate directors and place those candidates’ names on the company’s proxy ballots.

The SEC has wrestled for years with changes to make it easier for shareholders to nominate directors.

A federal court ruling last fall has increased pressure on the SEC by rejecting its staff’s long-standing view that companies may exclude shareholders from considering election-related proposals, including those targeting shareholder access to corporate proxy ballots.

At the first of three public round-table meetings on the topic Monday, Cox said the SEC would conduct a “top-to-bottom review” of shareholder proxy-voting issues before proposing new rules this summer.

The SEC is also reviewing whether companies should set up websites for investors to communicate with one another about pending proposals.

Shareholders would make nonbinding proposals on the websites that other investors could vote to adopt, said an executive of a technology company the agency has asked to evaluate the idea.