NYSE Implements New Restrictions on Broker Discretionary Voting

As the 2012 proxy season begins, public companies should be aware of recent changes to Rule 452 of the New York Stock Exchange that restrict broker discretionary voting on certain types of corporate governance proxy proposals. As a result of these changes, public companies may find it more difficult and more expensive to obtain stockholder approval of certain corporate governance related proxy proposals that are supported by company management. Each public company should consider the impact of the Rule 452 changes based on its own circumstances, including what constitutes a quorum at its annual meeting and the percentage ownership represented by institutional investors, as it determines how to proceed with the solicitation of proxies in favor of proposals supported by management.

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