General Approach to Shareholder Proposals – GL has updated its language regarding their approach to shareholder proposals in light of the recent announcements made by the SEC detailing upcoming changes to the no-action process. Specifically, GL has updated its policy to state that shareholders should have the opportunity to vote on matters of material importance, whilst acknowledging that some proposals may unduly burden companies and that not all proposals serve long-term shareholder interests. GL notes that this approach may be further revised prior to or during the 2026 proxy season.
Pay-for-Performance Evaluation – GL has updated its pay-for-performance model adopt a scorecard-based approach. The model now consists of up to six tests, each receiving an individual rating, and ratings will be aggregated on a weighted basis to produce an overall score ranging from 0 to 100.
Mandatory Arbitration – GL has introduced a policy targeting mandatory arbitration provisions; when reviewing documents at post-IPO and spin-off companies, if such provisions are included GL may
recommend against the chair of the governance committee, or in certain cases, the entire committee. GL will generally recommend opposing any bylaw or charter amendment that seeks to adopt mandatory arbitration unless the company is able to provide sufficient rationale.
Shareholder Rights – GL has updated its policy to state that it may issue adverse recommendations against governance committee members in situations where boards amend governing documents to reduce shareholder rights. Examples of this include limiting shareholders’ ability to submit proposals and replacing majority voting with plurality voting.
Supermajority Vote Requirements – GL has clarified its stance on supermajority vote provisions to state that while GL generally supports the removal of supermajority vote requirements, it recognizes that such provisions may protect minority shareholders in cases where an issuer has a large or controlling shareholder. In such cases, GL may oppose removing supermajority vote provisions.
To access full details regarding the policy updates, please click here. Please reach out to your relationship manager if you would like to further discuss these updates.