Determining and Disclosing the Effect of Broker Non-Votes
April 18, 2018
Brokers may vote uninstructed shares only on matters that are discretionary under NYSE Rule 452. The authors discuss the NYSE rule and the effect of broker non-votes under various voting and quorum standards under Delaware law. They suggest practitioners be particularly attentive to the disclosure of the effect of broker non-votes in proxy statements. They also caution that since the regulations are seldom perfectly clear, issuers and practitioners will often benefit by seeking NYSE guidance on whether brokers have discretion to vote uninstructed shares on specific proposals.