According to the NYT:
As many as one of every three Disney shares are expected to be withheld from voting on Mr. Eisner in next week's annual board election, according to two people close to Disney who have talked to companies tallying the early votes. That is a much higher percentage than dissident shareholders can usually muster in such votes.One would think that such a high negative vote would boost Comcast's chances, but with growing opposition to the bid on the part of Comcast's own shareholders, it may not have much impact. In any event, the really interesting point is that the dissidents are getting very close to the 35% percent trigger under the SEC's pending shareholder access rule. The SEC has tentatively indicated that this proxy season will count, assuming the rule is adopted, so if the dissidents get over the 35% hump next week, they could nominate a candidate next year.
The Times' indication that such a substantial percentage of withheld votes is rare implicates a question sent along a few days ago by a reader (and fellow corporate law professor):
Here with Disney we have one of the most visibly poorly-governed boards in the country fighting to entrench itself, and maybe it opponents will succeed in getting a level of 20% withheld votes. [Ed.: The email was sent before the latest surge in the opposition, back when it looked like they were going to come in around the 20% level.] What does this tell us about the frequency with which the nomination process will be triggered?It is a fair question, of course. Using historical standards, few uncontested proxy soliciations result in 35%+ of the vote being withheld for a director. On the other hand, adoption of the rule would shift the dynamic and perhaps induce more investors - especially institutional investors - to withhold their votes. After all, at present, doing so has very little payoff. If the rule is adopted, however, doing so will have a very big payoff.
