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Looking Ahead to The 2006 Proxy Season

By Heather R. Badami and Catherine Scavello
January 26, 2006

As the 2006 proxy season gets underway, shareholder activism shows no signs of slowing. Over the last few years, high-profile corporate scandals and news stories about executive excess and corporate waste have compelled many investors to seek — or demand — a more active role in corporate governance matters of the companies they own. Now that most companies have implemented the changes required by the Sarbanes-Oxley Act of 2002 (SOX) and the stock exchanges, the agenda of the shareholder activist is changing.

In November 2005, Institutional Shareholder Services (ISS), a leading proxy advisory firm, set the stage for the upcoming proxy season with the release of its 2006 corporate governance policy updates. Shareholder proposals submitted to date have followed the same themes, focused on the two hot topics for the 2006 proxy season: majority voting and executive compensation.

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