Three major U.S. corporations — AIG, Bristol-Myers Squibb and Time-Warner — recently amended their corporate by-laws in response to stockholder proposals submitted by Professor Lucian Bebchuk.
While stockholders usually propose advisory, non-binding resolutions, Bebchuk’s proposals involved the adoption of binding by-law provisions. “In my view, the potential benefits to investors from such proposals have not been fully realized,” said Bebchuk. “Such proposals might produce, without outside regulatory intervention, binding governance arrangements tailored to the circumstances of specific companies.”
Bebchuk designed model proposals and submitted them to a number of companies. “I am grateful to the law firm of Grant & Eisenhofer for its valuable advice during this process,” he said. Following discussions with Bebchuk, some of these companies agreed to adopt by-law amendments:
In the coming proxy season, proposals by Bebchuk are expected to be on the ballot at five companies:
The text of Bebchuk’s proposals and supporting statements can be found at http://www.law.harvard.edu/faculty/bebchuk/policy.htm.