While U.S. companies challenged more governance proposals this season at the Securities and Exchange Commission, investors so far have fared better than in 2008, according to a RiskMetrics Group analysis.

As of March 25, companies had filed no-action requests under the federal proxy rules to exclude almost 37 percent (212 of 574) of governance proposals tracked by RiskMetrics, up from 33 percent in 2008 and 20 percent in 2007.

At the same time, issuers are not having the same success in omitting proposals as they did in 2008. So far, companies prevailed in 47.8 percent (75 of 157) of the no-action cases decided by the SEC, down from 69 percent during the same period last year, according to RiskMetrics data. This year's corporate winning rate in Rule 14a-8 disputes is consistent with the 48 percent rate in 2007. Another 22 shareholder resolutions were withdrawn before the SEC acted on exclusion requests.

Companies have been more proficient in their efforts to exclude proposals concerning social and environmental issues. So far, issuers have objected to 95 of the 371 (25.6 percent) resolutions filed this season and prevailed in 67 percent (37) of the 55 cases decided by the SEC staff, according to RiskMetrics data.

One factor that contributed to the better showing by governance proponents this year is the large number of unsuccessful requests by companies to exclude proposals filed by retail investors affiliated with activist John Chevedden that seek to give shareholders the right to call special meetings. Most of these resolutions seek to extend that right to investor groups with at least a 10 percent stake. As of March 25, 29 such proposals had weathered no-action challenges, while nine resolutions were excluded. Last year, companies were able to omit 23 special meeting proposals; some lacked a specific minimum share threshold or had other defects that investors since have cured. This season, companies have raised a variety of arguments that have failed to persuade the SEC staff. For example, 3M and AMN Healthcare asserted that they had substantially implemented the proposal by adopting a 25 percent threshold, while Burlington Northern Santa Fe argued that the proposal is "impermissibly vague and indefinite."

Companies also tried again this year to exclude many of the cumulative voting proposals filed by Chevedden and other individual shareholders. In 2008, 13 of 30 resolutions were omitted; most were barred on the grounds that they conflicted with state law. So far this year, 11 cumulative voting resolutions have survived no-action challenges, while four were omitted. Intel and Motorola unsuccessfully argued that the proposal was "vague" and "misleading" because it didn't explain how cumulative voting would work with their majority voting provisions.

On March 18, the Financial Accounting Standards Board released a proposal to issue new guidance on: (1) measuring fair value of financial instruments in inactive markets, and (2) recording other-than-temporary impairment (OTTI) charges. Notwithstanding the controversial nature of these proposals (particularly OTTI), FASB is fast-tracking these changes at the behest of a Congressional directive to revise these rules as soon as possible. The comment period for these proposals is only two weeks to allow new rules to be in place for the first quarter of 2009. FASB has scheduled an April 2 meeting on the proposals.

In its first proposal, FASB reasserts (yet again) that fair value accounting does not require marking to distressed values or "fire sale" prices. FASB hopes to reduce the stigma associated with Level III assets, and in doing so cause assets listed with bad Level II valuations to be shifted to Level III. The guidance provides a checklist to help companies assess whether a market is inactive. While the checklist should be helpful in establishing the definition of an inactive market, it appears to provide many "outs" that make it much easier for a company to deem a market inactive.

The second proposal (issued after a 3-2 FASB vote) is far more concerning as FASB seems to be making it easier for companies to avoid taking OTTI charges on distressed securities (both debt and equity). In determining whether a security is impaired, FASB is essentially allowing companies to provide negative assurance that it will hold the security until recovery ("we do not intend to sell the security before it recovers")-- a much easier and defensible statement to make than the positive assurance that is now required ("we intend to hold the security until recovery"). As a result, if a company simply states that (a) it does not intend to sell a security and (b) it will likely not be required to sell the security, it need not take a charge (except to the extent there is a decline in value resulting from credit risk, as estimated by the company).

This proposal to loosen OTTI requirements is problematic as it will cause balance sheets to be even less representative of economic reality (for both financial and non-financial companies). Reducing transparency in this ultra-sensitive area will only breed more balance sheet distrust. This change also may penalize transparent companies who have been honest with their impairment assessments, while rewarding opaque companies who aggressively avoided charges.

We believe the investment community is best served by greater transparency into a company's economic reality as it allows for the most educated and rational decision-making. This Congressional directive seems to be a result of the financial institution agenda to "fix" accounting rules in a way that would cosmetically bolster their financial position, particularly for regulatory purposes. Expect this agenda to continue as it is much easier for financial institutions to pressure legislators to insist on GAAP accounting changes than it is for them to erase their recent history of bad loans and transactions that put them in this position in the first place. Additionally, in the face of dwindling regulatory capital, this agenda helps them maintain their regulatory ratios without having to ask for changes to regulatory requirements. We are concerned that the influence of financial institutions will spread to other accounting principles as well, and we sincerely hope that the current plan to consolidate off-balance sheet entities at the end of 2009 is not derailed.

RiskMetrics has released its annual Securities Class Action Services (SCAS) list of the top 50 plaintiffs law firms. The law firms on the SCAS 50 list are ranked by the total dollar amount of final securities class action settlements occurring in 2008 in which the firms served as lead or co-lead counsel.

The top five law firms on this year's 'SCAS 50' list were Bernstein Litowitz Berger & Grossmann; Barroway Topaz Kessler Meltzer & Check; Coughlin Stoia Geller Rudman & Robbins; Labaton Sucharow; and Grant & Eisenhofer.

Grant & Eisenhofer achieved the highest average settlement amount among law firms, averaging $109 million in its three settlements. The average settlement amount is an important indicator of which law firms are consistently bringing and settling high-impact cases. The most active firm regarding the number of settlements was Coughlin Stoia Geller Rudman & Robbins with 29 settlements, leading all firms with respect to the total number of final settlements.

According to Adam Savett, Head of RiskMetrics' Securities Class Action Services, "We can expect the number of new cases filed, and thus eventual settlements to continue trending at or above historical levels, due in part to the ongoing expansion of the fallout from the credit crisis. While there weren't any so called 'mega-settlements' finalized in 2008, we saw more than a dozen settlements valued at more than $50 million."

RiskMetrics has published its 'SCAS 50' list for the past six years. The list is intended to help institutional investors maximize shareholder value by highlighting those firms bringing in the most settlement dollars and playing the most active role in U.S. class action cases.

To access the SCAS 50 for 2008 report, please visit here.

Liquidity has been cited as a one of the main reasons for the systemic breakdown of the financial markets. Consequently, more investors are now looking into liquidity risk in addition to more typical risk measures. Liquidity risk, however, is not easily quantified.

Financial instruments that are not liquid have static pricing over long periods. Funds with a large percentage of their assets invested in these instruments can be categorized as illiquid, and tend to demonstrate relatively smooth monthly returns. We decided take a look at all the funds in the HFR universe, and categorized them as either liquid or illiquid by calculating their autocorrelation and thereby outing a value on how smooth their returns are. We calculated this value based upon 6 lags of autocorrelation and scaled so as to fit a chi square distribution. We then categorized a fund as illiquid if the probability that value exceeds the critical value associated with 5%. We considered a fund very illiquid if the probability that value exceeded the critical value associated with 1%.

We performed the analysis at two different times on the funds in the HFR database that reported returns for at least 24 months. The first analysis was performed in May 2007, with data through April 2007. The more recent analysis has data through January 2009. The initial analysis had a breakdown of 60/40 of liquid to illiquid funds. Now we're seeing a 50/50 split. On the highly illiquid front the breakdown was 76/24 liquid to highly illiquid, now it is 62/38 in favor of liquid funds. The analysis shows that funds are trending towards being more illiquid. This could be due to the fact that funds are holding their illiquid instruments and trying to realize the losses associated with them.

On a return analysis level, in the first study the illiquid funds had better 12 month returns than the liquid funds with the illiquid funds retuning 9.5% versus 7.8 for the more liquid funds. In the weaker market of the last year, the returns for funds on the whole have gone down tremendously and even more so for illiquid funds. The comparative returns for 12 month returns for illiquid vs. liquid funds is now roughly -22% to -7%. The conventional wisdom is that a liquidity premium exists and the return on illiquid instruments should be more than that of liquid instruments. In down markets, however, the opposite appears to be true.

To view the distribution of funds chart and returns by liquidity bucket chart, please visit here.

Amid the political backlash against American International Group's $165 million in "retention" payments, it's worth remembering that AIG shareholders--and the firm's federal trustees--will get to vote on the insurance giant's compensation practices.

Like other financial firms that have received federal assistance under the Troubled Asset Relief Program, AIG will be required to hold an advisory vote on compensation. While the company has not yet filed a preliminary proxy statement, AIG traditionally holds its annual meeting in mid-May.

Richard Ferlauto, director of corporate governance and investment policy at the American Federation of State, County, and Municipal Employees, said he expects AIG and other TARP firms with "huge and indiscriminate bonuses" to face significant shareholder dissent this season.

However, he notes that the only vote that really matters at AIG is that of the three federal trustees who oversee the government's 77.9 percent stake. In early March, the AIG Credit Facility Trust was issued 100,000 shares of Series C preferred stock; that stock is treated as converted and has voting rights on "substantially all matters," the company said in a Form 10-K filing.

Ferlauto said he hopes that the trustees will oppose AIG's pay practices during the advisory vote. Such a vote would send the message that "say on pay" is "a useful tool for reining in compensation gone wild," he said.

Shareholders also will vote on various management proposals to implement the terms of a March 1 agreement with the federal trustees. The company will seek to amend its certificate of incorporation to allow the issuance of preferred stock of unequal rank, to decrease the par value of common stock, to increase the common shares, and to ensure the seniority of preferred stock issued to the government in the future.

AFSCME and the AFL-CIO submitted a proposal that asks the board to require executives to hold a majority of their equity incentives for at least two years after the end of their employment. In a March 11 letter sent before the bonus controversy erupted, AFSCME asked AIG's trustees to support the holding-period resolution and to disclose the government's vote before the meeting.

The global banking sector is currently suffering through the most challenging and transformational financial crisis of a generation. Many banks failed to take seriously broad categories of sustainability-related risk, including high risk consumer finance assets, high risk corporate assets, and volatile commodity costs.

RiskMetrics will be hosting a webcast on Tuesday, March 24 at 11AM EDT that will examine global banks' exposure to these sustainability risks, and assess which are best equipped to manage those risks effectively. Gregory Larkin, banking sector analyst on RiskMetrics' sustainability research team, will address the following questions:

* What are the consumer assets banks are exposed to?

* How much of these assets are underpinned by borrowers who can't pay them back?

* What is the sustainability risk intensity of the companies that banks have financed?

* How much money might be lost if and when these risks materialize?

Dr. Matthew Kiernan, Co-Head of RiskMetrics' ESG Business, will moderate the webcast. To register for the webcast, please visit here.

Traditional credit underwriting in years past included assessment by banks of economic conditions, the borrower's character and ability to repay, his credit record, existing capital and collateral.

The deregulation of bank credit cards over the last 30 years, expected to bring improved competition among banks that would deliver the best deals for consumers, instead led to a number of unintended consequences that have been harmful.

This year, a new shareholder campaign in the U.S. has aimed to address the current realities behind the ballooning credit card debt carried by most Americans, among them: A disconnect between big banks and their individual credit customers that has allowed banks to abandon prudent lending practices, collateralization of credit card receivables into even more-removed derivatives that are bought and sold without much regard to the credit quality of their constituent parts, a lack of financial discipline or education from credit card issuers, aggressive marketing of cards with credit limits approaching or beyond some customers' annual income, and, perhaps most critically, very limited use of effective underwriting models to determine whether the borrower can actually repay the credit being extended.

Recent Federal Reserve surveys indicate that 75 percent of Americans have at least one credit card.

RiskMetrics Group, in a Sustainability Background Report on Banking and Predatory Lending released March 11, explains the activist shareholder campaign and banks' reaction to it. Three of the proposals, at Bank of America, Citigroup and JPMorgan Chase, have survived challenges by the companies at the SEC and face shareholder votes in the next few weeks.

Mark Regier, Stewardship Investing Services Manager for MMA Praxis Mutual Funds and the member of the Interfaith Center on Corporate Responsibility who drove the credit card proxy resolutions this year, tells RiskMetrics in the report that one of the greatest concerns behind this campaign for changes in credit card issuance is the fact that consumer income committed to paying back credit card debt with high interest rates is "money not going back into the productive economy, it's being used to patch holes in boats that are desperately leaking. We need consumers to spend desperately now [to stimulate the economy]. These are bad models, that show very little concern or desire for the borrower to be successful," he said. "The scale of the situation is so great that it's beyond banks' incremental approaches to it now," Regier said. "Out of desperation, banks are starting to get the picture."

The Securities and Exchange Commission has rejected Consol Energy's request to omit a novel proposal that seeks prompt disclosure of the vote results on shareholder proposals. In a Feb. 27 ruling, the SEC's Corporation Finance Division turned down the Pittsburgh, Pa.-based coal company's challenge, clearing the way for a vote at the firm's April 28 meeting.

The resolution, filed by two of New York City's pension funds, calls on Consol to disclose preliminary vote results to resolution proponents within five business days of a shareholder meeting. In their supporting statement, the city funds argue that expedited disclosure of vote results "could provide proponents and companies more time to consider appropriate actions, including meaningful dialogue, thereby increasing the opportunities for positive outcomes."

In seeking to exclude the proposal, Consol argued that it would violate Regulation FD (which prohibits selective disclosure of material information), was vague and indefinite, and would further a special interest not shared by other investors. In response, the New York City funds pointed out that Regulation FD bars only the disclosure of non-public information that someone might trade on, and noted that it is unlikely that early disclosure of votes on compensation or ESG proposals would affect any short-term trading decisions. The pension funds also pointed out that Consol could avoid any potential violation by releasing the information to all investors via the company's Web site, or by asking the proponents to agree not to trade on the information.

The resolution reflects the frustration experienced by proponents over the refusal of some companies to release vote results on a timely basis, even though the issuer often has preliminary results (because of electronic voting by many institutions) at the meeting. While many firms release preliminary results, some companies wait until their next 10-Q filing, which may be three months after the annual meeting, to disclose final vote results on proposals and director elections. It is not uncommon for companies with May meeting dates to decline to release their vote tallies until mid-August.

Other shareholders share these concerns over vote result disclosure. The Council of Institutional Investors has adopted a policy that urges issuers to release preliminary results at shareholder meetings and to disclose final tallies via a press release, 8-K filing, or a Web site announcement no later than one month after a meeting. As the council notes, "early release of final tallies would cultivate an environment of open communication and board accountability to shareowners."

The housing market collapse and resulting credit crisis have brought significant erosion of shareholder value, unprecedented levels of market volatility, and a continuing lack of confidence among market participants. Observers are questioning the role of executive compensation in incentivizing risk-taking behavior by executives who oversaw the creation and proliferation of the complex financial instruments at the root of the liquidity crisis.

RiskMetrics will host a webcast addressing these issues on Tuesday, March 17 at 11 a.m. EDT. Our webcast panel will share insights into management actions on stock and other incentive plans shareholders voted on in 2008 and what we're seeing in 2009.

Speakers include:
--Mark A. Borges, Compensia Inc.
--Andrew Letts, Vice President of Corporate Governance at State Street Global Advisors
--Laura Thatcher, Alston & Bird
--Valerie Ho, RiskMetrics' Head of Compensation Research

The panel will also cover other executive compensation hot topics, such as performance goal adjustment, award exchanges, and other trends to watch. Carol Bowie, Head of RiskMetrics' Governance Institute, will moderate the panel.

To register for this webcast, please visit here.

Hain Celestial investors gave 62 percent support to a "say on pay" proposal at the natural food company's March 11 annual meeting, according to Walden Asset Management, one of the proponents.

The vote surpassed the 45.6 percent support for "say on pay" at Hain in 2008, and is one of the best showings by a shareholder proposal seeking an advisory vote on executive compensation, trailing only the 67.5 percent vote at Sun Microsystems in November, and the 69.6 percent support at Activision in 2007.

After the Hain vote, Tim Smith, a senior vice president at Walden, said proponents will ask the Melville, N.Y.-based company to implement the proposal. Nineteen U.S. issuers have voluntarily agreed to hold annual advisory votes, while several hundred federally supported financial firms will be required to do so this year.

Hain, which took a $20.5 million restatement to account for misdated stock options from 1993 to 2005, has faced investor dissent over its pay practices. In 2008, four compensation committee members received more than 38 percent opposition.

Also this week, a Walden pay vote proposal won 42.3 percent support (based on the votes cast "for" and "against") at Walt Disney, according to proponents. That result is comparable to the 42.7 percent average support for "say on pay" resolutions at more than 50 U.S. companies in 2008. The March 10 vote at Disney presumably would have been higher but for the media-and-entertainment firm's relatively large (7.9 percent) insider voting block.

Recent vote results suggest that advisory vote proponents are gaining more support, but they may face a steeper climb at larger firms. Hain has a market capitalization of $476 million, and Sun Micro has a $3.4 billion market cap, while Disney has a stock value of $30.8 billion. Earlier this year, "say on pay" proposals won 44.3 percent support at Deere & Co. ($12 billion market cap) and received a 38 percent vote at Walgreen ($22 billion). However, Smith cautioned that it may be too soon to reach such a conclusion, given the small sample size and the limited proposal filings at small-cap firms.

RiskMetrics' Financial Research and Analysis Team raised concerns for 2009 regarding the likelihood of negative reserve revisions and impairment charges as oil and gas companies deal with the reality of lower oil and natural gas prices. As expected, negative reserve revisions were the norm and many companies took hundreds of millions of dollars, if not billions, in impairment charges. While the threat of reported price-related reserve revisions has subsided until early next year, the threat of impairment, ceiling test charges, covenant violations and reduction in borrowing bases remains imminent.

Going forward, energy companies will be preparing for the modernization of the U.S. Securities and Exchange Commission's (SEC) reserve disclosure rules that will go into effect for filings after December 31, 2009. These new rules have the potential to increase year-end 2009 reported reserve levels due in particular to the allowed disclosure of probable and possible reserves and the expansion in technologies allowed in booking reserves.

Julie Hilt Hannink, Riskmetrics' Oil and Gas Research Analyst, will discuss in this webcast on March 12 at 11 a.m. EDT companies at risk for further impairments, reserve revisions, covenant revisions and borrowing base reductions. She will also cover the potential winners and losers under the new rules and also how RiskMetrics is going to update its screening and analytical tools for the new disclosures. Dan Mahoney, Senior Industrials Research Analyst, will moderate the webcast.

To register for this webcast, please visit here.

The New York Stock Exchange (NYSE) has reissued a proposal to ban discretionary broker voting in uncontested board elections, prompting speculation among governance observers that the Securities and Exchange Commission may approve the rule change soon.

The proposed amendments to NYSE Rule 452 would remove uncontested board elections from the list of "routine" matters where brokers can vote client shares if they don't receive instructions within 10 days of a company's annual meeting.

Traditionally, many brokers have cast these uninstructed shares in favor of management nominees, a practice that can blunt the impact of "vote no" campaigns. Labor funds and other activists, which support the rule change, have denounced broker voting as "legalized ballot-box stuffing." Broker votes account for an estimated 19 percent of the votes cast at U.S. corporate meetings, according to Broadridge Financial.

On Feb. 26, the NYSE issued a third revised draft, and the SEC posted the rule for public comment. The rule change would apply to meetings after Jan. 1, 2010, assuming the commission approves it by then.

The proposed rule has languished at the SEC for several years. The NYSE, which first proposed the policy change in 2006, revised the draft rule to exempt mutual fund companies after they complained about the difficulties of reaching quorum. In 2007, SEC officials said they would address broker voting along with other proxy reforms, but ultimately the agency took no action. The issue wasn't addressed in 2008, when the SEC lacked a full set of commissioners during the first half of the year. In the meantime, some brokers have started using "proportional voting" (i.e., based on how their other clients have voted) to allocate uninstructed shares.

However, the new leadership of the SEC appears to be more receptive to the rule change. In a Feb. 18 speech, Commissioner Elisse Walter said, "we should move forward and determine whether to adopt these amendments" to Rule 452.

Barring broker votes, together with the majority-vote bylaws adopted by many large companies since 2006, would further elevate the importance of board elections in the U.S. market. Activists also are hopeful that the SEC will propose a proxy access rule this year to allow investors to nominate board candidates to appear on management proxy statements.

The SEC is accepting public comments on the proposed NYSE rule through this link.

Federally supported financial firms have begun filing their preliminary proxy materials that include an advisory vote on executive pay, as required by the U.S. economic stimulus legislation.

It appears that many financial companies, especially those with April meeting dates, had to work quickly to revise their proxy materials to comply with this new mandate. The "say on pay" requirement was added to the American Recovery and Reinvestment Act of 2009 late in the legislative process, and many investors and corporate advisers originally assumed the first votes would be in 2010, after the Securities and Exchange Commission prepared a rule on the topic. However, the SEC, after prodding from U.S. Sen. Christopher Dodd of Connecticut, confirmed Feb. 26 that Troubled Asset Relief Program (TARP) participants must hold pay votes in 2009 if they file their final proxy statements after Feb. 17. Governance observers expect that at least 280 firms will hold advisory votes this year, up from the six issuers that voluntarily did so in 2008.

So far, the SEC has not issued specific guidance on the language that TARP firms should include in their management proposals. In recognition of the tight deadlines faced by issuers with April meetings, the agency said companies may ask the SEC to expedite the 10-day review period (normally required after a preliminary proxy filing) before definitive proxy materials may be filed, so annual meetings won't have to be postponed.

Based on early proxy filings, it appears that most TARP companies are preparing agenda items that refer to the stimulus bill and closely track the legislation's requirements. In most cases, the firms are asking investors to approve the compensation paid to the named executive officers, as described in the "Compensation Discussion and Analysis" (CD&A) section of the proxy statement and the accompanying tabular disclosures.

Given the time constraints, most of the early filers have not included a detailed justification for their compensation practices. Many of the agenda items are rather brief; examples include United Bancorp (203 words), M&T Bank (223 words), and Citizens & Northern (285 words). In its agenda item, Olympia, Wash.-based Heritage Financial provides a general defense of its pay policies: "We believe that our compensation policies and procedures are reasonable in comparison both to our Peer Group and to our relatively strong performance of the Company during 2008. We also believe that our compensation program is effective and appropriate."

Bank of America is one of the few firms so far to highlight specific compensation practices. In its 474-word ballot item, the Charlotte-based bank points to its bonus recoupment policy, its "stringent" stock ownership restrictions, and the fact that no executive officers received any year-end cash or equity bonuses.

Marshall & Ilsley discusses in its 760-word agenda item how it seeks "to establish a direct correlation between the annual incentives awarded to [top executives] and the financial performance of the company. The Wisconsin-based firm explains that it made no incentive payments in 2008 to the named executive officers and that their total annual cash compensation decreased by 26 percent from 2007.

Mark Borges, a compensation consultant with Compensia who has reviewed several dozen early filings, noted that 26 firms closely followed the provisions in the stimulus bill, while 10 phrased their agenda items more broadly and included language like that used by Aflac, which held the first U.S. advisory vote in May 2008. During a March 4 panel hosted by TheCorporateCounsel.net, Borges said he expects to see more "sophisticated" proposals in the future that point to certain parts of the CD&A. Some of those agenda items may resemble the management proposals from Verizon Communications, Motorola, and other non-TARP firms that are voluntarily holding their first advisory votes this season, he said.

So far, all of the early filers note that the compensation vote is non-binding. Most proxy statements (21) say the compensation committee will consider the results of the shareholder vote, nine say the committee may do so, and five are silent on that issue, Borges said.

Some preliminary proxy statements at TARP firms include both a management proposal and a shareholder resolution on the issue. On Feb. 27, Bank of America asked the SEC for permission to exclude a shareholder proposal from retail investor Kenneth Steiner, although the bank had missed the regular deadline for filing no-action requests. Tim Smith of Walden Asset Management, a leading pay-vote advocate, said the company should have asked Steiner to withdraw his proposal before wasting shareholder money to submit a no-action request. Most pay-vote proponents are withdrawing their proposals at TARP firms to avoid any confusion. So far, investors have negotiated withdrawal agreements with nine of the 14 TARP where advisory vote resolutions were filed, Smith said.

The Canadian Imperial Bank of Commerce (CIBC), the Royal Bank of Canada (RBC), and the National Bank of Canada (NBC) all have agreed to hold an annual advisory vote on executive pay in 2010, becoming the first Canadian companies to do so.

CIBC and RBC announced the policy changes after shareholder proposals on the subject received majority support from investors--which rarely happens in Canada--at their annual meetings on Feb. 26. Bill Etherington, chairman at CIBC, said the bank would work with the proponents--MEDAC (Mouvement d'éducation et de défense des actionnaires) and Meritas Financial--as well as "other governance" organizations, and any other interested banks, in determining how a management pay-vote proposal would be drafted. At RBC, chairman David O'Brien said the board "will now be considering how best to give shareholders a vote on this important issue, and we commend those who brought the 'say on pay' proposals forward," according to The Globe and Mail newspaper. NBC agreed to provide a compensation vote in 2010, one day before its Feb. 27 meeting, where investors were to vote on the MEDAC request for an advisory vote. "In so doing, the bank is acknowledging the developments of the past few weeks relating to this matter and fulfilling a wish expressed by many of its shareholders," the Montreal-based bank said in a statement.

The moves by three of Canada's largest banks come as bank executives face investor criticism over bonuses. The banks, which hold their annual meetings early in the Canadian proxy season, traditionally have had a significant influence on the corporate governance practices at other firms.

As we noted on Feb. 24, Bursa Malaysia last month released a consultation paper inviting comments on proposed amendments to several Listing Requirements. Following "numerous requests by industry participants," the original deadline for comments of Feb. 27 has been extended to March 15.

Notably, Proposal 7.3, if adopted, would increase the permitted size of general mandates that could be requested by companies for the issuance of new shares on a non-pro rata basis from the current 10 percent of issued share capital to: 20 percent of issued share capital for an issue of shares on a non-pro rata basis to shareholders; or 50 percent of issued share capital for an issue of shares on a pro rata basis to shareholders.

This particular proposal follows similar changes in others part of Asia, including neighboring Singapore, which recently amended rules on share issuances to allow companies to issue up to 100 percent of issued share capital via a pro-rata rights issue, up from the 50 percent limit previously in place.