Majority voting for director elections and executive compensation will likely be the two top issues in the upcoming proxy season, according to GovernanceMetrics International. GMI says that while the Sarbanes-Oxley Act encouraged some changes, more recently activist shareholders have been making waves and bringing about improvements. In the past three years, says GMI, the number of independent directors at U.S. companies has climbed from 66% to 73%, while the average board size has dropped by 5%. Also, more companies are adopting the majority-vote rule, more than 120 using it now, up from “only a handful” as recent as last summer. “The majority vote movement certainly has gained traction,” GMI said in a release.
